NEW YORK — American Eagle Outfitters Inc. posted higher — though below initial plan — net earnings in the holiday fourth quarter and said first-quarter profits could show a similar soft increase.
In the three months ended Jan. 28, the specialty retailer earned $107.5 million, or 71 cents a diluted share, up from $100.9 million, or 66 cents, a year ago. Results in the most recent quarter include a 1-cent loss related to an agreement to sell certain assets to its Canadian distribution operation and 2-cent tax charge from the anticipated repatriation of foreign earnings; earnings in the year-ago period included a 4-cent loss from discontinued operations. Analysts had been expecting a profit of 72 cents. Quarterly net sales were $764.4 million, an increase of 13.4 percent from the prior year’s $674 million. Comparable-store sales were up 7.8 percent, versus a 28.6 percent rise in the year-ago quarter. Gross profits declined to 46.3 as a percent of sales, from 49.3 percent last year.
James O’Donnell, chief executive officer of Warrendale, Pa.-based retailer, said on a conference call with analysts that the fourth quarter was “a period that was less robust then we planned.” But he said the retailer’s fourth-quarter operating margin of 23 percent was the second highest ever and “reflects the strength of our people, appeal of the brand and disciplined operating procedures.”
In the year, the company’s net earnings rose 38 percent to $294.2 million, or $1.89, from $213.3 million, or $1.42, last year. Annual sales climbed 23 percent to $2.31 billion — the first time sales for the retailer passed over the $2 billion mark — from $1.88 billion last year, while same-store sales rose 15.5 percent.