Key Takeaways
- American Eagle Outfitters posted weaker-than-expected revenue and guidance as sales at its secondary brands declined.
- The young adult clothing retailer gave a soft outlook for current quarter revenue and operating income.
- The company’s shares were down on the news, and in the red for the year so far.
Shares of American Eagle Outfitters (AEO) fell after the young adult clothing retailer’s sales missed forecasts and it gave a soft outlook for the current quarter as its smaller brands struggled.
The parent of the American Eagle, Aerie, Unsubscribed, and Todd Snyder brands said second-quarter revenue rose 7.5% to $1.29 billion, about $20 million below the average estimate of analysts surveyed by Visible Alpha. Diluted earnings per share (EPS) of $0.39 were in line with expectations.
Sales at its American Eagle stores gained 7.9% to $827.6 million. They were up 9.3% to $415.6 million at Aerie. However, other brand sales slumped 47% to $57.5 million.
The news sent American Eagle’s shares down about 3%. The stock is down for the year, though less than 1%.
CEO Jay Schottenstein said the company was operating in “a dynamic macroeconomic environment,” and will “remain disciplined and focused on delivering profitable growth and long-term shareholder value.”
AEO is anticipating third-quarter revenue to be flat to up slightly from last year’s $1.3 billion, and operating income to be in the range of $120 million to $125 million. Visible Alpha predictions were for revenue of $1.31 billion and operating income of $137 million.
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