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American Eagle Outfitters (AEO) |
HenryTo
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 Posted: Wed Feb 06, 2008 4:39 pm Post subject: American Eagle Outfitters (AEO) |
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Prepare for some horrible retail numbers tomorrow. However, AEO is actually up 19 cents as I am typing this:
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American Eagle Same-Store Sales Fall
Wednesday February 6, 4:31 pm ET
American Eagle Same-Store Sales Drop 7 Percent in January As Traffic Declines
PITTSBURGH (AP) -- Teen apparel retailer American Eagle Outfitters Inc. said Wednesday its same-store sales fell 7 percent in January, widely missing Wall Street analyst estimates due to a drop in store traffic.
Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.
The drop was far lower than Wall Street analysts expected. Analysts polled by Thomson Financial predicted same-store sales would fall 3.4 percent at the chain.
For the four-week period ended Feb. 2, total sales fell 21 percent to $163.9 million from $207.1 million in the same period of 2007. The company said excluding sales from an extra week in the 2006 fiscal year, total sales rose 4 percent.
American Eagle said its store traffic fell during the month, but it was able to clear through its fall and holiday inventories.
Sales at most retailers have slowed recently as consumers restrict spending to deal with rising mortgage payments and high prices for food and gas.
For the fourth quarter, the company said it same-store sales fell 2 percent.
Total sales rose 2 percent to $995.4 million from $973.4 million for the 2006 fourth quarter. Excluding sales from the extra week in the prior fiscal year, the retailer said its quarterly sales rose 7 percent.
The company also reiterated its fourth-quarter guidance for earnings per share between 64 cents and 65 cents. Analysts expect earnings of 65 cents per share.
In the 2006 fourth quarter, the company earned 66 cents per share.
The company will report fourth-quarter earnings on March 12.
Shares rose 13 cents to $20.75 in electronic after-hours trading. During regular trading, shares fell 76 cents, or 3.6 percent, to close at $20.62 |
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American Eagle Outfitters (AEO) Replies |
HenryTo
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| Posted: Wed May 02, 2012 3:11 pm Post subject: |
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Morningstar issues revised 1Q guidance.
| Quote: | | American Eagle AEO reported Wednesday that its first-quarter total and same-store sales will be much stronger than expected. The company's original guidance called for earnings per share of $0.08-$0.10. Today's update offered guidance of $0.18-$0.20 for the first quarter, helped by 17% same-store sales (including AEO direct) and total sales growth of 18% year over year to $719 million. A more balanced promotional environment and strong merchandising provided American Eagle with a boost during the period. At year-end, there was no forecast for full-year earnings (the company planned on providing it during May's earnings call), although we estimated EPS would be $1.03 for fiscal 2012. Management has now released its full-year forecast of $1.06-$1.12, which is in line with our updated forecast when we adjust for first-quarter sales and earnings per share provided today. We have been a long-term advocate of American Eagle, insisting that it has a better merchandising strategy than a number of other retailers. With new leadership in 2012, we expect more positive changes as Robert Hanson evaluates and improves the operational side of the business, and there could be additional upside beyond our current fair value estimate as investor sentiment improves and strategies that are to be implemented become public. We are maintaining our fair value estimate of $20 today but will re-evaluate it May 23, when the company reports first-quarter earnings in entirety and provides us with more data on the year ahead. |
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HenryTo
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| Posted: Wed Mar 07, 2012 12:30 pm Post subject: |
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Morningstar on AEO's 4Q earnings.
| Quote: | | American Eagle AEO reported fourth-quarter earnings Wednesday that were largely in line with its revised expectations released Jan. 5. The company had lowered its fourth-quarter earnings per share forecast from $0.40-$0.44 to $0.33-$0.35 excluding the impact of store impairment charges and executive transition costs. Today's release delivered adjusted earnings of $0.35, but when including both the executive transition costs ($0.02) and store impairment charges ($0.07), the GAAP earnings were $0.26 per share. We think it is important to recognize this number, as closing stores is an operating decision of the business, and we do believe management will continue to open stores in more productive locations and close stores in less productive locations. The fourth quarter reported a redundant story that's been told consistently across the retail industry. First, average unit costs increased significantly and continued to pressure margins. Second, increased markdowns during the holiday season added pressure on profitability. American Eagle delivered gross margins of 34.1%, down from 39.4% in the fourth quarter last year. Input costs drove half of the 610-basis-point decline in merchandise margin with the remainder coming from promotions. This contraction was offset by an 80-basis-point improvement in buying, occupancy, and warehousing costs in the period. Although the gross margin line experienced a fair amount of pressure, we were still imp ressed by top-line growth, with total sales up 14% to $1.04 billion and same-store sales up 10%. The company gave forward guidance for the first quarter only, expecting earnings per share of $0.08-$0.10, in line with the current consensus estimates of $0.10. We expect full-year EPS guidance after the first quarter is reported, but for now management has indicated that sales should increase modestly, as should margins. However, it doesn't seem we are out of the woods yet with the apparel companies, as we wait for cost pressure to subside, which is unlikely to happen for at least another few months. Additionally, as energy prices remain higher than usual, we fear that new cost pressures could become a problem on the shipping front. We still think American Eagle is one of the best-run apparel retailers, and it will more likely be pressured from external forces than internal forces in the year ahead. We would expect the company to benefit materially in the second half from avera ge unit cost declines that are significant and think the second half of the year could be very strong for the firm. |
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HenryTo
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| Posted: Wed May 25, 2011 6:59 pm Post subject: |
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Morningstar on AEO's 1Q earnings:
| Quote: | As anticipated, American Eagle's AEO first-quarter results reflected the intensely promotional teen apparel retail category and elevated teen unemployment rates, as comparable-store sales fell 8% against a 5% gain in the year-ago period. Still, the company's profitability was more resilient than most of its peers (including Aeropostale ARO and Gap GPS) thanks to excellent inventory management in the face of rapidly climbing sourcing cost pressures and prudent operating cost controls. Gross margins may have contracted 170 basis points to 38.0% during the quarter, but a 70-basis-point increase in merchandise margins and flat selling, general, and administrative costs as a percentage of sales (26%) both suggest cost-control efforts have been successful. Although we don't believe these merchandise margin trends are sustainable throughout the year given cotton cost inflation, we think the market may be underestimating the company's ability to preserve margins this year and find management's outlook for earnings per share similar to last year's $1.02 as a reasonable target (though admittedly helped by share repurchases). We plan to make some minor adjustments to our full-year estimates based on the first-quarter results--sales trends in the second quarter to date have improved relative to the first quarter, although we now expect a modest decline in full-year comparable-store sales--but the impact should be negated by modestly higher operating margins than initially expected. There is no change to our $20 fair value estimate, and we believe the current share price offers value at roughly 10.6 times our preliminary 2012 (year ended January 2013) EPS outlook and an enterprise value/EBITDA multiple of 4 times.
Despite the soft first-quarter revenue growth trends and inflationary headwinds, teen apparel retailers are inherently cyclical. We continue to view American Eagle's current issues as more cyclical than structural--especially considering teen unemployment rates and sourcing cost inflation--but acknowledge the increased competition the company faces from fast-fashion retailers. Still, assuming our forecast plays out as expected and the firm can increase operating margins to the midteens over the next five years (compared with an average of 20% in 2005-0 , we believe the current stock price offers considerable value. We also continue to believe that American Eagle meets the typical leveraged buyout target requirements of being a strong free cash flow generator with minimal financial leverage. Based on $1.9 billion in additional debt (4 times our fiscal 2011 EBITDA estimate), mid-single-digit revenue growth and operating margins averaging 15% over the next decade, an enterprise value/EBITDA exit multiple of 7-8 times, and an internal rate of return requirement of 15%-20%, we view $20-$24 per share as a appropriate leveraged buyout range (which is consistent with other takeover multiples in retail). |
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HenryTo
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| Posted: Thu Mar 10, 2011 12:51 am Post subject: |
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Morningstar on AEO's 4Q earnings:
| Quote: | | American Eagle Outfitters AEO reported fourth-quarter results that reflected a weaker top line but strong operating margins, affirming our view that tight inventory and expense controls will enable the retailer to ride out near-term challenges in the teen apparel market. Results were in line with our expectations, and we are maintaining our $20 fair value estimate. Trading at less than 13 times our forward earnings estimate and an enterprise value that is 5 times our forward EBITDA estimate, the shares are undervalued, in our opinion. Total quarterly revenue was down 6%, largely because of a 7% drop in comparable-store sales, partially offset by incremental sales from the international and e-commerce segments. Deep discounting at premium rival Abercrombie & Fitch ANF continued to hurt sales at domestic AE stores during the holiday season. However, we remain confident that American Eagle can attract teens back to its stores once the marketplace return to a normalized level of discounting as teen unemployment pressures ease, given its solid brand name and affordable price points. Additionally, we were impressed that the retailer managed to expand the operating margin by 310 basis points to 14.6%, despite increased markdown activities to clear excess merchandise during the quarter, validating our thesis that the retailer's disciplined approach in managing inventories will yield positive results in the near term. At the end of fourth quarter, year-over-year inventory per square foot decreased 7%, with the first-quarter average weekly inventory per square foot forecast to be down in the high single digits. Entering into fiscal 2011 with relatively clean inventories, we are confident that the firm will be able to navigate the higher-sourcing-cost environment over the next few quarters and project that it can maintain the high-single-digit operating margin for the year. Overall, we view management's earnings per share forecast of roughly $1.00 in 2011 (similar to the $1.02 posted in 2010) as reasonable. |
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HenryTo
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| Posted: Thu Aug 26, 2010 6:02 pm Post subject: |
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Morningstar on AEO's 2Q earnings:
| Quote: | | American Eagle Outfitters' AEO second-quarter results reflected an intensely promotional environment, with widespread price cuts across the teen retail space, hurting both the firm's top line and margins during the period. Since unemployment among 16- to 19-year-olds remains high (26.1% as of July), we see no indication that these price cuts will abate anytime soon, and these discounts will probably weigh on American Eagle's near-term results. However, we think current levels of promotional activity are not sustainable in the long run and remain confident that the chain can attract teens back to its stores once we return to a normalized level of discounting as unemployment pressures ease. Additionally, we believe current sourcing initiatives, better inventory management, and growth in the newer aerie concept should boost results over the next few years. Therefore, trading at less than 12 times our forward earnings estimate and at an enterprise value/EBITDA of 4 times, we think American Eagle shares look attractive. Quarterly revenue grew 1% to $652 million, driven by a 17% increase in internet sales but offset by a 1% decline in comparable store sales. Price wars among teen retailers exacerbated throughout the quarter, as premium chain Abercrombie & Fitch ANF slashed prices as much as 50% on some items, forcing American Eagle to follow suit, with a high-single-digit decline in average prices during the period. Given lower selling prices, American Eagle's quarterly operating margin contracted significantly to 5.9%, down from 9.2%. On a brighter note, however, the firm managed to clear most of its summer merchandise through these promotional activities, with inventory per square foot up only 1.0% at the end of the quarter. In our view, similar trends will continue into the back half of the year, and we estimate that comparable sales will be flat for the full year (which implies slightly negative comparable sales for the next two quarters). While merchandise margins will likely be impacted by lower selling prices, we believe the firm will be able to offset most of these pressures through benefits from inventory allocation systems and supply chain efficiencies. Therefore, we estimate that the full-year operating margin will be similar to the 8.5% margin posted in 2009, despite the 160 basis point decline year-to-date. |
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HenryTo
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| Posted: Thu Jan 08, 2009 7:52 am Post subject: |
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Not surprisingly, American Eagle disappoints yet again:
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American Eagle Outfitters Reports December Sales of $493.5 Million, Same Store Sales Decrease 17%, Updates Fourth Quarter EPS Guidance
Thursday January 8, 8:00 am ET
PITTSBURGH--(BUSINESS WIRE)--American Eagle Outfitters, Inc. (NYSE: AEO - News) today announced that total sales for the five weeks ended January 3, 2009 decreased 10% to $493.5 million, compared to $546.1 million for the five weeks ended January 5, 2008. Comparable store sales decreased 17% for the month, compared to a 2% decrease for the same period last year.
December sales for the AE brand deteriorated from November and were well below the company’s recent expectations. During key December holiday shopping periods, traffic and conversion were disappointing. The company is currently clearing through holiday merchandise and expects to enter the spring season with fresh inventories, consistent with its plan.
Total sales for the year-to-date eleven month period ended January 3, 2009 decreased 2% to $2.849 billion, compared to $2.892 billion for the eleven month period ended January 5, 2008. Comparable store sales decreased 10% for the year-to-date period compared to the same period last year.
The company is reducing its fourth quarter earnings guidance based on lower-than-expected December sales, a revised outlook for January, and increased markdowns. The current fourth quarter earnings expectation is a range of $0.19 to $0.21, which excludes any potential other-than-temporary impairment charge related to investment securities. This compares to fourth quarter EPS of $0.66 last year. The company’s previous fourth quarter earnings guidance was $0.30 to $0.36 per share.
To access the company’s recorded monthly sales commentary, please dial (866) 514-0390, or internationally dial (585) 267-8021.
American Eagle Outfitters, Inc., through its subsidiaries, (“AEO, Inc.”) offers high-quality, on-trend clothing, accessories and personal care products at affordable prices. The American Eagle Outfitters® brand targets 15 to 25 year old girls and guys, with 858 stores in the U.S. and Canada and online at www.ae.com. aerie® by american eagle offers Dormwear® and intimates collections for the AE® girl, with 116 standalone stores in the U.S. and Canada and online at www.aerie.com. MARTIN + OSA® provides Refined Casual™ fashions for 28 to 40 year old men and women at its 28 stores and online at www.martinandosa.com. The latest brand, 77kids™ by american eagle™, is available online only at www.77kids.com. 77kids offers “kid cool,” durable clothing and accessories for kids ages two to 10. AE.COM®, the online home of the brands of AEO, Inc. ships to more than 60 countries worldwide. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Wed May 28, 2008 9:21 am Post subject: |
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Shares currently up over 9% on better-than-expected earnings:
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American Eagle profit falls
Wednesday May 28, 8:40 am ET
NEW YORK (Reuters) - Teen apparel retailer American Eagle Outfitters Inc (NYSE:AEO - News) said on Wednesday quarterly net profit fell, hurt by greater markdowns resulting from lower-than-expected sales.
The mall-based chain, known for colorful, casual fashions, said net profit in the first quarter was $43.9 million, or 21 cents per share, compared with $78.8 million, or 35 cents per share, a year earlier.
The company had forecast a first-quarter profit ranging from 18 cents to 20 cents per share.
The Pittsburgh-based company operates the preppy American Eagle Outfitters chain as well as aerie, which sells intimates for young women, and Martin & Osa, which sells sportswear for men and women aged 25 to 40.
As previously disclosed, sales rose 5 percent to $640.3 million in the quarter, which ended on May 3, but same-store sales, a key retail metric, fell 6 percent.
American Eagle said it expects earnings for the current quarter to range from 28 cents to 30 cents per share, which would be down from 37 cents per share a year ago. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Thu May 08, 2008 8:46 am Post subject: |
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American Eagle's April same-store sales actually beat estimates but the stock is down - as the entire retail industry sells off this morning:
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American Eagle April sales up; maintains outlook
Thu May 8, 2008 8:23am EDT
NEW YORK, May 8 (Reuters) - Teen clothing retailer American Eagle Outfitters Inc. (AEO.N: Quote, Profile, Research) said on Thursday that sales at stores open at least a year rose 2 percent in April, and stood by its first-quarter outlook.
Analysts, on average, had expected a decrease of 0.6 percent, according to Reuters Estimates.
Total sales rose 15 percent to $197.7 million for the four weeks ended May 3.
Sales in the month were helped by an improvement in store traffic, more seasonal weather and its summer line of products, the company said in a statement.
Sales rose 5 percent to $640.3 million in the quarter. However, sale-store sales fell 6 percent in the 13-week period, the company said.
Still, American Eagle said it continues to expect a first-quarter profit of 18 cents a share to 20 cents a share. |
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