Teen clothing retailer American Eagle Outfitters, Inc. (AEO: News ) on Wednesday said its second-quarter earnings from continuing operations declined from a year ago and missed analysts' expectations, as higher product costs squeezed margins. Looking ahead, the company provided an outlook for the third quarter and lowered its earnings guidance for fiscal year 2011.
The Pittsburgh, Pennsylvania-based company's income from continuing operations for the latest quarter declined to $19.67 million or $0.10 per share from $25.84 million or $0.13 per share in the year-ago period. On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.11 per share for the quarter. Analysts' estimates typically exclude special items.
The company had earlier forecast earnings in a range of $0.10 to $0.13 per share.
However, net income for the quarter increased, including the prior-year quarter's loss from discontinued operations of $16.18 million or $0.08 per share.
Net sales increased 4 percent to $675.70 million from $651.50 million in the year-ago period. Analysts had a consensus estimate of $650.78 million. Comparable store sales for the quarter were flat, compared to a 1 percent decrease last year. Gross margin declined to 34.3 percent from 36.8 percent in the prior-year period.
Merchandise profit dollars increased slightly over last year due to lower markdowns. However, higher product costs caused a 150 basis point decline in merchandise margin.
Buying, occupancy and warehousing costs increased 100 basis points as a rate to sales, primarily due to lease renewals, flat comparable store sales and rent costs resulting from new store openings.
Looking ahead to the third quarter, American Eagle forecasts earnings in a range of $0.22 to $0.27 per share. This compares to adjusted earnings per share from continuing operations of $0.29 per share last year. Analysts currently expect the company to earn $0.27 per share in the quarter.
The company said that although it has tempered sales expectations for the second half, particularly during non-peak shopping periods, sales could be stronger than the first half, driven by investments in key items...
Continue Reading: RTTNews
The Pittsburgh, Pennsylvania-based company's income from continuing operations for the latest quarter declined to $19.67 million or $0.10 per share from $25.84 million or $0.13 per share in the year-ago period. On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.11 per share for the quarter. Analysts' estimates typically exclude special items.
The company had earlier forecast earnings in a range of $0.10 to $0.13 per share.
However, net income for the quarter increased, including the prior-year quarter's loss from discontinued operations of $16.18 million or $0.08 per share.
Net sales increased 4 percent to $675.70 million from $651.50 million in the year-ago period. Analysts had a consensus estimate of $650.78 million. Comparable store sales for the quarter were flat, compared to a 1 percent decrease last year. Gross margin declined to 34.3 percent from 36.8 percent in the prior-year period.
Merchandise profit dollars increased slightly over last year due to lower markdowns. However, higher product costs caused a 150 basis point decline in merchandise margin.
Buying, occupancy and warehousing costs increased 100 basis points as a rate to sales, primarily due to lease renewals, flat comparable store sales and rent costs resulting from new store openings.
Looking ahead to the third quarter, American Eagle forecasts earnings in a range of $0.22 to $0.27 per share. This compares to adjusted earnings per share from continuing operations of $0.29 per share last year. Analysts currently expect the company to earn $0.27 per share in the quarter.
The company said that although it has tempered sales expectations for the second half, particularly during non-peak shopping periods, sales could be stronger than the first half, driven by investments in key items...
Continue Reading: RTTNews
