American Eagle Outfitters Inc.
) reported disappointing net sales and comparable store sales
(comps) results for the holiday season. The retailer's sales and
traffic remained soft during Christmas owing to stiff competition
from other retailers with better promotional offers. Battered by
holiday results, the company also cut its earnings forecast for
the fourth quarter of fiscal 2013.
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Since the announcement of the dismal sales results, shares of
this apparel and shoe retailer slumped 16.7% as of Jan 24, 2014.
Alongside, the stock reached a 52-week low of $12.76.
This Pittsburgh, PA-based company delivered total sales of $882
million, down 2% from $904 million recorded last year. Comps also
slipped 7% compared to a 5% year-over-year rise.
American Eagle now expects its fourth-quarter fiscal 2013
earnings to dovetail with the lower-end of previously provided
guidance range of 26 cents to 30 cents a share. In sync with the
company's guidance, the current Zacks Consensus Estimate for the
fourth quarter witnessed a downtrend of 10.3% to 26 cents a share
from 29 cents in the past 30 days.
American Eagle also posted disappointing third-quarter fiscal
2013 results in early December. For the said quarter, the
company reported a 53.7% year-over-year decline in earnings per
share. Net sales recorded a 5.8% decline from the prior year.
Revenues skidded mainly due to lower average unit retail and
average dollar sale.
Moreover, the last traded price of this Zacks Rank #5 (Strong
Sell) stock is 22.3% below the Zacks Consensus average analyst
price target of $16.43. The company has long-term projected
earnings per share (EPS) growth rate of 8.9%, relatively lower
than the peer group average of 15.5% and it currently trades at a
forward P/E of 17.5x, a 0.7% premium to the peer group average of
Not all stocks are performing as poorly as American Eagle. Other
better-ranked stocks in the apparel and shoe sector include
Finish Line Inc.
Abercrombie & Fitch Co.
The Men's Wearhouse, Inc.
) all holding a Zacks Rank #2 (Buy).