American Eagle Outfitters Corp. saw fourth-quarter sales and profits slip and served up forecasts for the start of 2017 that left Wall Street wanting more.
Investors, which have developed hair-trigger reactions for any sign of weakness, sent shares of the company down 10 percent to $14.27 right after the opening bell on the New York Stock Exchange.
The company’s fourth-quarter net income fourth quarter fell 33.1 percent $54.6 million, or 30 cents a diluted share, from $81.7 million, or 42 cents, a year earlier.
Excluding asset impairment, restructuring and other charges, the company said its earnings per share tallied 39 cents — 1 cent ahead of the 38 cents analysts projected.
Revenues for the three months ended Jan. 28 fell 0.8 percent to $1.1 billion from $1.11 billion with a comparable sales gain that was described as “up slightly.”
For the full year, the retailer’s earnings slipped 2.6 percent to $212.4 million even as sales gained 2.5 percent to $3.61 billion with a 3 percent comp sales gain.
But the comp sales outlook for the first quarter, calling for performance between flat and a low-single-digit decline, indicated that the trend would continue to weaken.
Earnings per share for the current quarter are slated to come in at 15 cents to 17 cents, well below the 22 cents analysts were hoping for.
Jay Schottenstein, chief executive officer, focused on the bright side as the company rolled out results.
“The American Eagle brand continued its strong leadership in jeans and bottoms and has experienced accelerated growth in women’s apparel,” Schottenstein said. “Aerie posted double-digit sales growth throughout 2016, fueled by superior merchandise, a strengthening customer base and growing brand awareness. We’ve made great progress, yet we have much more opportunity across the marketplace. I’m confident that the strength of our brands and focused priorities will enable us to deliver long-term returns to our shareholders.”
Retailers across the mall have been struggling mightily as shoppers turn more to the web for shopping and also focus more of their spending on experiences instead of physical products. It’s a dynamic that has Macy’s Inc., J.C. Penney Co. Inc. and a host of other retailers closing stores or refocusing their operations.