The firm also disclosed that it’s seeking to acquire or start a new brand concept focused on the young professional, a slightly older demographic than its current teen emphasis within AE.
The Warrendale, Pa.-based purveyor of preppy, all-American looks for young men and women reported income of $43.9 million, or 60 cents a share, for the quarter ended Feb. 2, beating expectations by 2 cents. That’s 10.7 percent below income of $49.1 million, or 68 cents, in the year-ago period. Sales for the quarter increased 9.6 percent to $464.3 million, which included $29.7 million from the Bluenotes/Thriftys operation, from $423.7 million. Comparable-store sales decreased 2.1 percent, weaker than expected.
“The fourth-quarter promotional environment was like no other in recent history,” Roger…Markfield,…president and chief merchandising officer, said on a morning conference call. “The soft economy and uncertainty following Sept. 11 hampered mall traffic and was compounded by particularly warm weather in November, a month that typically accounts for significant sell-throughs of sweaters and outerwear.” The end result, he said, was higher-than-planned sweater markdowns, pressuring comps and margins.
Looking ahead to the first half, executives reaffirmed Wall Street’s consensus estimates of 22 cents a share for the first quarter and 23 cents for the second. The retailer also said its expects flat same-store sales for the balance of the first quarter.
AE previously announced February comps declined 2.4 percent, versus relatively easy year-ago comps of negative 5 percent.
For the year, the retailer posted income of a record $105.5 million, or $1.43, 12.5 percent higher than last year’s $93.8 million, or $1.30. Sales increased 25.5 percent to $1.37 billion, including $100.7 million from Bluenotes/Thriftys, from $1.09 billion, and were up 2.3 percent on a comp basis.