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American Eagle Outfitters' Q3 earnings improve 17 percent

By Prachi Singh

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Report

American Eagle Outfitters reported EPS of 0.41 dollar for the third quarter ended October 29, 2016, a 17 percent increase from EPS from continuing operations of 0.35 dollar for the comparable quarter last year. Total net revenue increased 2 percent to 941 million dollars from 919 million dollars last year. Consolidated comparable sales increased 2 percent, following a 9 percent increase last year.

“I’m pleased that we continued to deliver strong results in a tough retail climate, with the third quarter reaching record sales and marking the 9th consecutive quarter of profit improvement,” said Chief Executive Officer, Jay Schottenstein.

Detailed third quarter results

Total gross profit increased 3 percent to 378 million dollars from 368 million dollars last year. The gross margin rose 20 basis points to a rate of 40.2 percent. Operating income increased 8 percent to 118 million dollars from 109 million dollars last year, and the operating margin expanded by 70 basis points to 12.6 percent as a rate to revenue. Net income per share last year, which included a 0.03 dollar EPS gain from discontinued operations, was 0.38 dollar.

In the quarter, the company opened four AE stores, six Aerie stores and one Tailgate store. In the same period, three AE stores were closed. Additionally, eight new licensed locations were opened, while closing three locations.

Expects EPS between 0.37 to 0.39 dollar in Q4

For the fourth quarter, the company expects EPS of 0.37 dollar to 0.39 dollar based on comparable sales in the range of flat to a low single digit increase. This guidance excludes potential asset impairment and restructuring charges. Last year’s fourth quarter reported EPS of 0.42 dollar included approximately $0.07 of non-recurring items, including a gain on the sale of a distribution center and a lower tax rate related to income tax settlements, federal tax credits and tax strategies. Excluding these items, last year’s adjusted EPS was 0.35 dollar.

Picture:American Eagle Outfitters

American Eagle Outfitters