Retailer American Eagle Outfitters Inc. (AEO, Financial) reported its second-quarter 2017 earnings before the opening bell on Aug. 23.
The Pittsburgh-based apparel retailer posted EPS of 19 cents, beating estimates of 16 cents per share. Quarterly revenue of $845 million surpassed expectations of $824 million and increased 3% from the prior-year quarter. In contrast, net income fell to $21.2 million, or 12 cents per share, from $41.6 million, or 23 cents per share, in the comparable quarter of 2016.
After the announcement, shares soared about 7% in premarket trading to open at $12.60 on Wednesday.
The graph below illustrates the trend in the company’s revenue growth over the past decade.
American Eagle’s total same-store sales rose 2% during the quarter, beating the anticipated 0.4% decline. This was backed by 26% growth in the comparable sales of its Aerie brand, which specializes in lingerie and intimate apparel.
CEO Jay Schottenstein said the company exceeded its own expectations despite a challenging retail environment.
“Sales trends improved and I’m proud of the continued growth in jeans, bottoms, women’s apparel and Aerie, with encouraging signs in men’s tops beginning to emerge,” he said.
For the third quarter, American Eagle expects EPS between 36 cents and 38 cents based on flat to low single-digit growth in same-store sales.
“Our brands are strong and we have significant opportunity for further growth,” Schottenstein said. “I’m optimistic as we enter the second half of the year, and we remain focused on delivering product innovation, strengthening customer engagement and improving profit flow-through.”
With 2.2% of outstanding shares, Chuck Royce (Trades, Portfolio) is the company’s largest guru shareholder. A total of nine gurus own the stock.
Disclosure: I do not own any stocks mentioned.
