American Eagle quarterly sales beat estimates, profits slashed
American Eagle Outfitters (AEO) Inc on Tuesday beat Wall Street estimates for quarterly revenue, as shoppers returned to work and social events post-pandemic, lifting spending on its jeans and dresses, despite rising inflation.
The company's net revenue fell to $1.24 billion in the third quarter from $1.27 billion a year earlier.
According to a Reuters report, analysts had expected revenue of $1.21 billion, according to IBES data from Refinitiv.
Brand revenue declined 5%, better than the company’s expectation for a high single digit decline, while Aerie revenue of $350 million rose 11%. American Eagle revenue of $838 million declined 11%.
Net income was slashed to $81.3 million, from $152.2 million in the prior-year quarter. Operating income totalled $118 million, reflecting a 9.5% margin. This included an approximately $10 million loss from Quiet Platforms, said the company.
“I’m pleased to deliver a third quarter that exceeded our expectations, with profit margins meaningfully improved from the first half of the year. Bold actions to rationalize inventory and reduce expenses are paying off,” said Jay Schottenstein, AEO executive chairman and chief executive officer.
“As we navigate the current macro environment, we remain focused on our strategic initiatives — leading with innovation and judiciously investing in capabilities that will differentiate us in the long-run. Our organization is strong and I have tremendous confidence in the resilience of our brands. We are excited about upcoming merchandise collections and look forward to delivering an exceptional customer experience across brands and channels this holiday season."
For the fourth quarter, the company said it is guiding brand revenue down in the mid single digits, and expects brand comps to be consistent with the third quarter.
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