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American Eagle posts Q3 EPS of 0.36 dollar

American Eagle Outfitters reported EPS of 0.36 dollar for the third quarter ended October 28, 2017. Excluding restructuring and related charges of 0.01 dollar per diluted share, the company’s adjusted EPS was 0.37 dollar for the third quarter. Total net revenue increased 2 percent to 960 million dollars, while consolidated comparable sales were up 3 percent, following a 2percent increase last year.

Commenting on the company’s performance, Jay Schottenstein, Chief Executive Officer said in a press release: “The third quarter produced record sales, sequential margin improvement and marked eleven straight quarters of comp sales growth. Digital sales continued to grow at a rapid pace, while we also saw store sales strengthen. I’m very pleased to see strong momentum continue into the fourth quarter, positioning us well for the next few critical weeks of the holiday season.”

Third quarter financial results

Gross profit for the quarter was 375 million dollars compared to 378 million dollars last year with a gross margin rate of 39 percent to revenue compared to 40.2 percent last year, a 120 basis point decline due to higher promotions and increased shipping costs associated with a strong digital business.

Operating income was 111 million dollars including 4 million dollars of restructuring charges related to severance and a lease buy-out. Adjusted operating income was 115 million dollars compared to 118 million dollars last year with a rate of 11.9 percent to revenue compared to 12.6 percent last year.

During the quarter, the company opened four new AE stores, with one in Mexico, one in Canada and two in the US. Additionally, the company opened one new Aerie location in Canada and 11 international licensed stores and closed one. The company added that it is on track to close a total of 25 to 30 stores this year.

American Eagle Outfitters expects rise in Q4 EPS

Based on an anticipated comparable store sales increase in the mid-single digits, management expects fourth quarter 2017 EPS to be approximately 0.42 dollar to 0.44 dollar. Last year’s fourth quarter reported EPS of 0.30 dollar that included approximately 0.09 dollar per share of asset impairment, restructuring and related charges. Excluding these items, last year’s fourth quarter adjusted EPS was 0.39 dollar.

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