Tags: American Eagle | Holiday | Profit | Forecast

American Eagle's Holiday Quarter Profit Forecast Falls Short

Thursday, 04 Dec 2014 06:15 PM

Teen apparel retailer American Eagle Outfitters Inc. forecast a current-quarter profit that missed analysts' estimates and reported its fifth straight fall quarterly income as weak mall traffic and online competition hurt sales.

Shares of the company, which also said it would close 150 stores in North America over the next three years, sank in trading after the bell on Thursday.

American Eagle along with teen apparel retailers Aeropostale Inc. and Abercrombie & Fitch Co. have been struggling to boost sales as shoppers make more of their purchases online shopping or spend more on technology and food.

Increased competition from fast-fashion brands such as H&M , Forever 21 and Inditex's Zara, which bring the latest styles from the runway to their stores within weeks, have also driven traffic away from their stores.

American Eagle, which operates the American Eagle and Aeris brands, said it expects to earn 30-33 cents per share in the fourth-quarter ending January.

Analysts' on average had expected 35 cents per share, according to Thomson Reuters I/B/E/S.

Aeropostale and Abercrombie also cut their holiday quarter profit forecasts on Wednesday.

Gap Inc. on Thursday reported a better-than-expected 6 percent rise in same-store sales for November, sending its shares up 3.5 percent after market.

American Eagle said same-store sales, which include online sales, fell 5 percent in the third quarter. This was in-line with the analysts' average estimate, according to research firm Consensus Metrix.

Net income fell 63 percent to $9 million, or 5 cents per share in the third quarter ended Nov. 1.

American Eagle said it recorded restructuring charges of $18 million as it cut jobs and consolidated offices. It also recorded a $33 million charge related to store closures.

Excluding these items, profit was 22 cents per share and in line with expectations.

Revenue declined slightly to $854.3 million from $857.3 million a year earlier. Analysts on average had expected revenue of $845.9 million.

Shortly after 6 p.m. in New York, American Eagle's shares were down 7 percent at $12.85, after falling 3.8 percent during the regular session. Up to Thursday's close, American Eagle's shares had fallen 4 percent this year. Abercrombie's stock had lost 15.2 percent, while Aeropostale's is down nearly 73 percent in the same period.

© 2017 Thomson/Reuters. All rights reserved.

   
1Like our page
2Share
Companies
Teen apparel retailer American Eagle Outfitters Inc. forecast a current-quarter profit that missed analysts' estimates and reported its fifth straight fall quarterly income as weak mall traffic and online competition hurt sales. Its shares sank.
American Eagle, Holiday, Profit, Forecast
371
2014-15-04
Thursday, 04 Dec 2014 06:15 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved