American Eagle Outfitters Inc. announced plans to close an additional 150 stores after posting sluggish sales today, joining a crowd of North American retailers with lower-than-predicted results.
The teen-apparel chain, which is seeking a new chief executive officer, will close the locations over the next three years. Last quarter, sales at stores open at least a year declined 10 percent, worse than the 7.8 percent drop analysts had estimated. Shares of the Pittsburgh-based company fell as much as 4.5 percent in New York trading.
Retailers including PetSmart Inc., Target Corp. and Sears Canada Inc. also reported same-store sales declines today, underscoring the impact of a particularly cold winter and still-shaky consumer confidence. Not all retailers are suffering, though. Tiffany & Co., the luxury-jewelry chain, posted first-quarter profit that beat analysts’ estimates and raised its forecast for the year.
PetSmart, the largest pet-store chain, cut its annual earnings forecast to $4.29 to $4.39 a share, down from a range of as much as $4.54. Comparable-store sales dropped 0.6 percent last quarter, missing the 1.5 percent gain that analysts had estimated. Its stock dropped as much as 8.7 percent to $56.77, marking the worst intraday decline in more than a year.
“We did not achieve our sales goals, which were impacted by a challenging and volatile consumer environment and a competitive market,” David Lenhardt, CEO of Phoenix-based PetSmart, said in a statement.
Frostbitten Sales
At Sears Canada, a department-store chain that’s majority-owned by Sears Holdings Corp., its quarterly net loss widened to C$75.2 million ($69 million), or 74 cents a share, from C$31.2 million, or 31 cents, a year earlier. Sales fell 11 percent to C$771.7 million.
The business’s struggles have prompted its U.S. parent to consider a sale or spinoff of its remaining 51 percent stake. Sears Holdings, run by hedge-fund manager Eddie Lampert, said last week that it will hire an investment bank to study options for the Canadian operation, which has a total market value of about $1.4 billion.
In the most recent quarter, a late spring took a toll on sales, Sears Canada CEO Douglas Campbell said today.
“Sales of spring merchandise were below last year, as winter-like weather was prevalent in most parts of the country well into the new season,” he said in a statement.
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