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American Eagle “gaining consistency” in tough market, jeans and intimates bright spots


American Eagle Outfitters is finding it tough going clawing its way back to success.

Its shares closed down 9.6% Wednesday, mostly on a downbeat same-store sales outlook alongside Q4 earnings that fell as sales struggled.

That was the bad news. But there were signs of strength too. On the upside, the retailer said the core American Eagle brand continued its “strong leadership” in jeans and bottoms and saw “accelerated growth” in womenswear.

Even better, its blossoming intimates/swimwear brand Aerie posted double-digit sales growth throughout 2016, AE said, citing “superior merchandise, a strengthening customer base and growing brand awareness.”

But back to the not-so-good-news. On Wednesday the teen giant said profits for the final quarter fell to $54.6m/30 cents a share from $81.7m/42 cents a year ago.

However, adjusted earnings of 39 cents per share were a penny above analysts’ expectations.

The retailer posted revenue down just 1% to $1.1bn, which fell just short of the $1.11bn analysts expected. It said same-store sales “were up slightly”, following a 4% increase a year ago. Analysts had pencilled in 0.4% comps growth.

CEO Jay Schottenstein said: “I’m extremely proud that our strategic priorities, centred on product innovation and customer focus, have delivered results and greater consistency throughout 2016, despite a highly competitive and challenging retail landscape.”

For the current quarter ending in May, American Eagle expects EPS ranging 15-17 cents. The retailer expects same-store sales of flat to a low single-digit decline, compared to analysts call for 0.8% growth.


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