American Eagle Outfitters, Inc
) comparable-store sales (comps) grew at a slower pace for the
fourth-quarter-to-date period ended January 8, 2013, dragging the
share price down by 3.3% to close at $19.94 on Thursday.
Pittsburgh-based fashion retailer's total sales increased 5%
during the period. Including the company's online business, total
comps increased 5% versus a 13% growth reported during the
comparable prior-year period. The company's online business grew
24% year over year.
However, sans the online business, the company's consolidated
comps inched up 1% compared with a 12% increase reported in the
Despite soft sales, American Eagle did not deter from its
shareholder friendly moves, and continues to buy back shares. It
deployed $105 million during December 2012, towards repurchasing
5 million shares.
Concurrently, the company also maintained its fourth-quarter
fiscal 2012 earnings outlook of 54 cents to 56 cents per share,
reflecting a year-over-year growth of 38% to 44%. The company
also reiterated its mid single-digit growth in comps. The
current Zacks Consensus Estimate for the quarter is pegged at 56
cents per share, which is at the higher end of company's guidance
range. Management believes that prudent inventory management,
along with better merchandise assortments and balanced
promotional activities are imparting strength to the stock.
American Eagle is now focusing more on cost-saving
initiatives, merchandise assortments, addition of more compelling
brands, managing inventory level much diligently and augmenting
e-commerce business. Further, in order to focus more on the core
business, while generating the best-possible return for
shareholders, the company has exited its children's brand -
American Eagle, a peer of
), carries a Zacks Rank #2 (Buy) for the next 1-3 months.
Moreover, we maintain our long-term 'Outperform' recommendation
on the stock.
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