American Eagle achieves record quarterly revenues despite disappointing comps
Continued strong growth at American Eagle Outfitters’ Aerie lingerie brand helped drive the Pittsburgh-based apparel retailer’s record-breaking sales in the second quarter. However, shares in the company dropped 13% on Wednesday, as slowing comps came in under Wall Street’s expectations.
For the second quarter ended August 3, 2019, the company announced total net revenue of $1.04 billion, an increase of $76 million, or 8%, compared to the $965 million reported in the prior-year period.
While Aerie boasted a comparable sales increase of 16%, the retailer’s namesake flagship brand saw a 1% decline, with whole-company consolidated comps posting a 2% rise. According to CNBC, analysts surveyed by Refinitiv had expected American Eagle to report a 3.1% increase in comparable sales.
The company’s quarterly net income totaled $64.98 million, or $0.38 per diluted share, up from $60.33 million, or $0.34 per diluted share, in Q2 2018.
“We had a number of wins and accomplishments in the second quarter, yet we were disappointed to report operating results below our expectations,” said American Eagle Outfitters Chairman and CEO Jay Schottenstein in a release. “We faced challenges largely stemming from underperformance in certain seasonal categories and a delayed start to back-to-school. Despite this, we delivered our 18th consecutive quarter of positive consolidated comparable sales growth.”
Taking into account the first quarter, American Eagle Outfitters reported $1.92 billion in sales for the first half of fiscal 2019, an increase of 8% compared to $1.79 billion in the same period in the previous year.
Net income for the six-month period came to $105.73 million, or $0.61 per diluted share, up from $100.26 million, or $0.56 per diluted share.
The company ended the first half of the year with 939 American Eagle stores, 131 stand-alone Aerie locations and 236 licensed international stores.
Looking forward, American Eagle Outfitters expects to see a comparable sales increase in the low to mid-single digits in the third quarter, while diluted EPS is predicted to be between $0.47 and $0.49.
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