By  on May 13, 2005

NEW YORK — The hottest specialty apparel retailers got even hotter in the first quarter, despite concerns over poor weather and the Easter holiday calendar shift.

As American Eagle Outfitters Inc. more than doubled its quarterly profits, Urban Outfitters Inc. came in with a 62.7 percent surge in net earnings and Pacific Sunwear of California posted a 17.6 percent quarterly profit increase.

Thanks to full-price selling of trend-right denim, pants, knit tops, shorts and accessories, American Eagle said net earnings jumped to $55.3 million, or 35 cents a diluted share — beating both its own and analysts' expectations by a penny — from $25.3 million, or 17 cents, in the year-earlier quarter. Net revenues in the period ended April 30 popped 36.7 percent to $454 million, while same-store sales increased 27.1 percent.

"We continued to remain focused on the disciplines of the business, such as strong merchandise assortments which continue to drive our positive comps, translating into the reduction in markdowns compared to last year," said Jim O'Donnell, chief executive officer of American Eagle, in a post-earnings conference call. Gross profits as a percent of sales expanded 420 basis points to 48.9 percent from 44.7 percent last year.

"American Eagle delivered another outstanding quarter, reflecting the best fashion-value equation it its space," Lazard Capital Markets analyst Todd Slater wrote in a Thursday research report.

Shares of the retailer nevertheless ended Thursday trading down 6.2 percent at $26.44 on New York Stock Exchange as investors questioned whether the company can maintain the earnings acceleration it has seen over the past year.

O'Donnell, however, said on the call that "future growth prospects" are a "top priority" for the company, yet he remained mum on the company's new concept, which is still expected to launch in the fall of 2006.

American Eagle announced plans for a new concept in November. Analysts suspect that it will cater to an audience slightly older than the company's core 15-to-25 age group.

The company forecast second-quarter earnings to be 32 cents to 33 cents a share, ahead of analysts' expectation for 31 cents. American Eagle plans to open 42 stores this year, and remodel 50 to 55.

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