Teen retailer American Eagle Outfitters raises outlook for 3Q
American Eagle Outfitters Inc. raised its earnings guidance for the third quarter, while it continues to battle discounters and cope with sluggish sales.
The South-Side-based retailer of teen clothing said Wednesday it expects to post operating earnings of 19 cents a share in the quarter ended Nov. 2, excluding the cost of closing a distribution center in Marshall in 2015. The outlook, revised from the previous 14 cents to 16 cents, is based on “slightly better than expected margin results,” it said in a statement.
Stephanie Wissink, an analyst at Piper Jaffray Cos., Minneapolis, said the previous outlook was “very conservative,” so the revision was “not that significant numerically.”
But the higher guidance suggests that coming off weak back-to-school sales, American Eagle was able to better manage inventory for the October-November-December period, said Wissink. That means it wouldn’t have excess clothing that it will need to sell at deep discounts.
Wissink said, however, American Eagle is still facing competitive pressure from discounters such as TJ Maxx and Marshalls.
American Eagle said Wednesday that revenue for the quarter decreased 6 percent to $857 million from $910 million the year earlier. The company plans to release complete financial results on Dec. 6.
The stock closed at $14.65 a share Wednesday, down 60 cents.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at firstname.lastname@example.org.