Shares of American Eagle Outfitters Inc. fell 6.9 percent in early trading today after the company’s first-quarter earnings per share narrowly missed Wall Street’s estimates.
For the quarter ended April 29, the teen retailer said net income dropped 37.7 percent to $25.2 million, or 14 cents a diluted share, from net income of $40.5 million, or 22 cents, a year ago. Excluding restructuring and related charges, EPS totaled 16 cents — 1 cent below the 17 cents projected by Wall Street’s consensus estimates.
Revenues for the period increased 1.7 percent to $761.8 million, better than the $741.7 million in revenues analysts projected.
Jay Schottenstein, chief executive officer, cited the retailer’s “strong digital business” as a bright spot during the quarter, adding that first-quarter results “reflected mall traffic headwinds, especially early in the quarter.” He noted that the retailer saw improving trends over Easter.
“As we look ahead, we are taking the right steps to improve our results and adjust our business for today’s rapidly evolving retail environment. We are creating efficiencies across our organization, as we aim to continue capitalizing on the strength of our brands, product leadership and other competitive advantages,” the ceo said.
Schottenstein noted that the company’s repurchase of six million shares during the quarter “reflects the company’s strong cash flow, healthy balance sheet and confidence in our brands and long-term strategic initiatives.”
Shares of American Eagle were trading at $12.06 at 9:52 a.m. on the New York Stock Exchange.
Like most retailers, American Eagle is searching for an approach that works in today’s digitally obsessed, Millennial-driven market that has store traffic on the wane.
The company is said to have been at least exploring the possibility of acquiring competitor Abercrombie & Fitch Co., which tapped an investment bank to find suitors.
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