On November 21, 2023, a shopper walked through an American Eagle store in Glendale, California.
Justin Sullivan | Getty Images
american eagle It issued weak holiday guidance on Wednesday and cut its full-year forecast as the company competes with value-seeking consumers willing to spend only during key shopping moments.
The clothing retailer’s revenue fell slightly short of Wall Street forecasts, but net profit beat expectations.
Here’s how American Eagle performed in the fiscal third quarter compared to Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted 48 cents Expected 46 cents
- income: $1.29 billion Expected to be $1.3 billion
The company reported net profit of $80 million, or 41 cents a share, for the three months ended Nov. 2, compared with $96.7 million, or 49 cents a share, a year earlier. Excluding one-time charges related to restructuring and impairment costs, American Eagle posted adjusted profit of 48 cents per share.
Sales fell to $1.29 billion, down about 1% from $1.3 billion in the same period last year.
Although not by much, Wednesday’s results fell short of expectations, marking the third straight quarter in which American Eagle has missed Wall Street’s sales targets.
Shares fell about 13% in after-hours trading.
Chief Executive Jay Schottenstein in a statement praised the back-to-school shopping season as “strong” but said demand remains inconsistent between major shopping events.
“We enter the holiday season in a strong position with our leading brands offering high-quality merchandise, great gifts and an exceptional shopping experience across channels,” said Schottenstein. “Key sales periods have seen positive customer response, but we remain Be aware that fluctuations may occur during off-peak hours.”
It has been a consistent theme across the retail industry that consumers show up at key shopping moments and then drop off dramatically. Foot cabinet A similar dynamic was noted when reporting earnings earlier Wednesday, dollar tree.
American Eagle expects holiday quarter comparable sales to increase approximately 1% and total sales to decline approximately 4%, including an $85 million impact from fewer sales weeks and a later start to the holiday shopping season. The outlook is below StreetAccount’s forecast of 2.2% comparable sales growth and LSEG’s forecast of a 1% sales decline.
As a result, American Eagle now expects full-year comparable sales to grow 3%, below its previous guidance of 4% growth and below StreetAccount’s forecast of 4.1%. Full-year sales are now expected to grow 1%, below previous guidance of 2% to 3% and below LSEG’s forecast of 2.5% growth.
Similar to other retailers, American Eagle is taking a cautious approach in the second half of the year as it faces uncertainty about the 2024 election and the overall macroeconomic environment. But unlike its rivals, it has maintained a cautious approach.
Both Abercrombie & Fitch and dick’s sporting goodsThe company issued a cautious outlook earlier this year but reversed that earlier sentiment when it reported earnings earlier this month.
Despite the poor outlook and weak sales, American Eagle is still seeing strong demand for its Aerie brand. Aerie’s third-quarter revenue hit a record high in the company’s history, with comparable sales up 5% from 12% in the same period last year.
About The Author
