View of the American Eagle Outfitters store in Arlington, Virginia.
Erin Scott | Reuters
Actions American Eagle Outfitters fell Wednesday in after-hours trading as the corporate lowered its full-year guidance.
The corporate lowered its forecast regardless that it was in keeping with Wall Street’s quarterly earnings expectations and exceeded revenue expectations.
The mall retailer said it now expects operating income to be between $250 million and $270 million, below the range of $270 million to $310 million it predicted in March. He said he predicted full-year revenues to be flat to low single digits, delaying the flat to single digits he had predicted earlier.
Sales trends slowed as the corporate began its second quarter, which the retailer has included in its guidelines. In the course of the earnings call, Jen Foyle, the corporate’s creative director, said she hopes shoppers will buy more seasonal items as Memorial Day rolls around and summer weather holds.
Shares fell about 14% after the corporate’s post-market earnings report.
Here’s how the corporate fared within the three-month period ending April 29, in comparison with Wall Street’s predictions, based on an analyst survey by Refinitiv:
- Earnings per share: 17 cents, adjusted versus expected 17 cents
- Revenue: $1.08 billion vs. $1.07 billion expected
American Eagle, which incorporates its namesake brand and the Aerie brand, was a serious departure from its competitor, Abercrombie & Fitch. Earlier on Wednesday, Abercrombie shares soared because it posted a surprise gain and raised its outlook, lifting American Eagle shares with it.
Earlier increases were lost to American Eagle, which after the bell reported its own quarterly results, including falling profits. Net income fell roughly 42% to $18.45 million, or 9 cents a share, from $31.74 million, or 16 cents a share, within the year-ago period.
Total net income rose about 2% to $1.08 billion from $1.06 billion a yr ago. Store revenue increased by 5%. Digital revenue fell 4%.
Its brands had mixed results. Comparable sales of Aerie increased by 2%, but comparable sales of the American Eagle brand of the identical name decreased by 2% in comparison with the prior-year period.
American Eagle has made progress on inventory levels. Many retailers, including Objective, Kohl and others stuck with an excessive amount of goods after shipments got stuck in the provision chain and consumer preferences shifted away from categories popular in the course of the Covid-19 pandemic.
Inventories fell 8% to $625 million at the top of the quarter in comparison with a yr ago.
In a press release, CEO Jay Schottenstein said the corporate was seeking to rebuild operating margins and pursue profitable growth. He said he was specializing in “inventory discipline, cost savings and efficiency across the business,” particularly in a tougher economic environment.