By  on August 23, 2017
Youngsters pass an American Eagle Outfitters clothing store, in New York. Retail sales managed a modest increase in July after two consecutive declines, but the strength was concentrated in higher sales of autos and gasoline. Most other retailers saw their sales fallEconomy, New York, USA

Shares of American Eagle Outfitters Inc. rose 6.2 percent in early-morning trading after the company reported second quarter results that bested Wall Street’s estimates, even though profits dropped by nearly half from a year ago.For the three months ended July 29, the teen retailer posted a 48.9 percent drop in net income to $21.2 million, or 12 cents a diluted share, from $41.6 million, or 23 cents, a year ago. Excluding restructuring charges, adjusted earnings per share was 19 cents for the quarter. Net revenues rose 2.7 percent to $844.6 million from $822.6 million. Comparable-store sales rose 2 percent on top of a 3 percent gain last year.Wall Street ‘s consensus estimate was EPS of 16 cents on revenues of $824.0 million.Shares of American Eagle were at $11.91 shortly after the markets opened.Jay Schottenstein, chief executive officer, said the company “achieved sales and earnings above our expectations in 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.”The ceo said the company remains focused on delivering product innovation and strengthening its engagement with customers.The company said its capital expenditure for the quarter totaled $46 million. It said it continues to expect fiscal year 2017’s capital expenditures in the range of $160 million to $170 million. Half of that spend is expected to be for store remodeling projects and new store openings, while the balance will be used to support the e-commerce business along with “general corporate maintenance,” the company said.Expecting comps to range flat to up low single digit, the company guided third quarter EPS to the range of 36 cents to 38 cents. It said guidance excludes possible asset impairment and restructuring charges. The year ago EPS was 41 cents.The company opened nine Aerie stores, with seven in new markets. It also opened six American Eagle stores, with two in Mexico and four in the U.S. Further, there were nine international licensed stores opened and three that were closed.   For the second half, the company plans to open another five American Eagle stores and five Aerie stores in the U.S., Canada and Mexico, along with 32 international licensed stores. It also said the company is on tract to close a total of 25 to 40 stores this year.   

To access this article, click here to subscribe or to log in.

load comments
blog comments powered by Disqus