Shares of American Eagle Outfitters Inc. fell 9.5 percent Friday after the company reported declines in third-quarter results and updated fourth-quarter guidance below analysts’ consensus estimates. For the three months ended Nov. 2, net income was down 68.3 percent to $24.9 million, or 13 cents a diluted share, from $78.6 million, or 39 cents, a year ago. EPS on a GAAP basis includes a non-cash charge of 6 cents a diluted share in connection with the plans to close its Warrendale, Pa., distribution center after the chain opens its new facility in Hazelton, Pa. Total net revenues also fell by 5.8 percent to $857.3 million from $910.4 million. Consolidated comparable-store sales, including its direct channel, fell 5 percent versus a 10 percent gain last year. Robert Hanson, chief executive officer, said during a conference call to Wall Street analysts, “We continue to operate in the most challenging sector of retail where there has been intense promotional competition and tepid consumer spending. This has led to weak store traffic and the high level of promotional activity.…In the third quarter, good expense management was offset by top-line pressure and weak merchandise margins.” RELATED CONTENT: WWD Earnings Tracker >> He added that business conditions remain tough in the firm’s North American mainline stores. “We need to deliver stronger assortments and ensure we have compelling innovative key items at outstanding value. In order to win, we need to be differentiated and deliver excellence in trending quality combined with a great customer experience,” he said. While Hanson said the company has been working on initiatives to improve performance in 2014, he expects “conditions to remain challenging and we’re planning accordingly.” The company said fourth-quarter diluted earnings per share are expected in the range of 26 cents to 30 cents, based on a “midsingle-digit decline” in comps. Analysts were expecting 39 cents as the consensus estimate. That’s compared with fourth-quarter EPS of 55 cents a year ago. American Eagle is the latest retailer in the teen space that has reported declines in third-quarter results. According to Jeff Edelman, a former retail analyst and now director of retail and consumer products advisory services at McGladrey, the problem faced by all the teen retailers is one regarding merchandising. Separately, the retailer said that Chad Kessler will be joining the company as chief merchandising and designer officer for the core American Eagle brand in early February. He succeeds Fred Grover, who is retiring after 35 years.
To celebrate Pride 2018, @themarcjacobs released the #GratefulNotHateful campaign, a social media initiative aimed at extending Pride beyond the parade. Inspired by Jacobs’ everyday outlook, the campaign features Jacobs along with a group of models and social media stars who are members and supporters of the LGBT community, all seen wearing @marcbeauty’s Highliner Gel Eye Crayons in colors of the rainbow. Head to our Instagram stories to see close-ups of the liner. #wwdbeauty
Virgil Abloh’s dad Nee and Don Crawley, cofounder of RSVP Gallery, were some of the hometown crew at the Chicago-born designer’s debut show for Louis Vuitton. (📸: @jdiderich ) #wwdmens #louisvuitton #virgilabloh
About last night: @marycharteris and @adwoaaboah hit up Hyde Park for the Serpentine Galleries’ annual summer party held in partnership with @chanelofficial. Head to WWD.com to see more photos. #wwdfashion
“This is Paris, my first show. I’m all about democracy. If some kid shows up, flew from New Jersey to just be around, let’s get him a seat.” — @virgilabloh tells WWD’s @jdiderich ahead of his first show for @louisvuitton men’s. (📸: @alfredo_piola ) #wwdmens #virgilabloh #louisvuitton
“Kate Spade was a true fashion icon who brought joy to the lives of women around the world, and inspired women to live life to the fullest. We are dedicated to carrying on her legacy,” said Anna Bakst, brand president and chief executive officer of @katespadeny. The Kate Spade Foundation announced that it will be donating $1 million to suicide prevention and mental health awareness in tribute to the recent death of Kate Spade. Read more on WWD.com. #wwdnews (📷: @chinseephoto)
A first look at @virgilabloh’s sneakers for @louisvuitton. Abloh spoke to WWD about his debut collection for Louis Vuitton, creating @kendalljenner’s #metgala outfit and redefining the heritage brand. Read the full story on WWD.com. #wwdfashion 📷: @alfredo_piola)
The world’s largest producer of denim @iskodenim is sharing the strategy behind its product development process. Read our full interview with ISKO’s product development manager Baris Ozden on the company’s extensive research practices, upcoming denim trends and the latest material innovations on WWD.com. #iskodenim