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American Eagle Q3 revenues decline, earnings in positive

By Prachi Singh

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REPORT_ American Eagle Outfitters reported adjusted earnings of 0.22 dollars per diluted share for the third quarter ended November 1, 2014, compared to adjusted earnings of 0.19 dollars per share for the comparable quarter last year. Total net revenue declined slightly to 854 million dollars from 857 million dollars last year. Consolidated comparable sales decreased 5 percent, compared to a 5 percent decrease last year.

Commenting on the results, Jay Schottenstein, Interim CEO said, “Consistent with our previous announcement, the third quarter delivered higher margins and 16 percent adjusted earnings growth over last year, in a highly challenging and competitive marketplace. We managed the business better and were able to reduce markdown rates and control expenses.”

Gross profit increased 6 percent to 315 million dollars and rose 200 basis points to 36.9 percent as a rate to revenue. The margin improvement was driven primarily by reduced markdowns and was partially offset by 120 basis points of buying, occupancy and warehousing deleverage. Adjusted operating income increased 22 percent to 74 million dollars. The operating margin expanded 160 basis points to 8.7 percent as a rate to revenue. Adjusted EPS of 0.22 dollars compares to 0.19 dollars last year, a 16 percent increase.

Based on a slight decline in revenue and a mid-single-digit decline in comparable sales, management expects fourth quarter EPS to be approximately 0.30 dollars to 0.33 dollars compared to adjusted earnings of 0.27 dollars per diluted share last year.

American Eagle Outfitters