American Eagle's Holiday Comps Up - Analyst Blog
January 09 2012 - 6:15AM
Zacks
Clothing retailer American Eagle Outfitters
Inc. (AEO) achieved robust same store results for the
holiday shopping season between November and December. The
company’s comparable store sales for the two month period ended
December 31, 2011, rose 12% as shoppers responded favorably to the
company’s assortments and promotional events. This compares to a 7%
decrease recorded in the year-ago period.
Owing to the support of shoppers, American Eagle registered a
15% increase in total sales for November and December. Sales
numbers for the period reached $887 million compared to $771
million for the same period last year.
The holiday season at American Eagle started on a promising note
registering a near 20% rise in comparable store sales for November.
Robust sales during the Thanksgiving weekend and improved unit
sales guided the November comps increase.
While November ended strong, the company resorted to an
aggressive promotion strategy to check competition in the final two
weeks of December. Despite the pressure on margins, the promotions
benefited the company’s unit sales, amplified its market share and
also helped hit the desired inventory levels.
However, American Eagle cut its EPS guidance for the fourth
quarter to range between 33 cents and 35 cents, excluding potential
impairment charges. The company had earlier guided to earn between
40 cents and 44 cents per share for the fourth quarter.
The current Zacks consensus earnings estimate for the fourth
quarter is 43 cents per share.
American Eagle is expected to bring out its fourth quarter and
full-year 2011 financial results on March 7, 2012.
American Eagle together with its subsidiaries engages in the
design and marketing of casual clothing. The company has a strong
portfolio of well-established brands, each of which is focused on
the unique characteristics and rapidly changing preferences of its
customers.
The company operates in a highly fragmented specialty retail
sector and faces intense competition from other teenage-focused
retailers, such as Abercrombie & Fitch Co.
(ANF) and Gap Inc. (GPS).
We currently have a short-term Zacks #2 Rank (Buy) and a
long-term Outperform recommendation on the stock.
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
ABERCROMBIE (ANF): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
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