- Prachi Singh |
American Eagle Outfitters, Inc. (AEO) reported EPS of 38 cents for the second quarter ended August 3, 2019 compared to 34 cents for the same quarter last year. The company said, excluding restructuring charges of 1 cent, adjusted EPS was 39 cents. Total net revenue for the quarter increased 76 million dollars or 8 percent to 1.04 billion dollars including 40 million dollars for Japan license royalties. Consolidated comparable sales increased 2 percent, following a 9 percent comparable sales increase last year.
Commenting on the trading update, Jay Schottenstein, AEO’s Chairman and Chief Executive Officer said in a statement: “We had a number of wins and accomplishments in the second quarter, yet we were disappointed to report operating results below our expectations. We faced challenges largely stemming from underperformance in certain seasonal categories and a delayed start to back-to-school. Despite this, we delivered our 18th consecutive quarter of positive consolidated comparable sales growth.”
Highlights of AEO’s second quarter results By brand, American Eagle’s comparable sales decreased 1 percent, following a 7 percent increase last year. Aerie’s comparable sales increased 16 percent, building on a 27 percent increase last year and marking the 19th consecutive quarter of double-digit growth.
Gross profit rose 8 percent to 383 million dollars, while the gross margin rate was 36.7 percent compared to 36.6 percent last year. During the quarter, the company opened six American Eagle stores and closed three, ending with 939 American Eagle stores, including 158 Aerie side-by-side locations. Additionally, the company opened 13 Aerie stand-alone stores and closed one, ending with 131 Aerie stand-alone stores. Internationally, the company ended the quarter with 236 licensed stores compared to 223 last year.
The company said, cased on an anticipated comparable sales increase in the low to mid single digits, management expects third quarter EPS to be approximately 47 cents to 49 cents compared to 48 cents for the third quarter last year.