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American Eagle Outfitters: Q1 adjusted EPS increase 44 percent

By Prachi Singh

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Business

American Eagle Outfitters, Inc. recorded EPS of 0.22 dollar for the quarter ended May 5, 2018, compared to 0.14 dollar for the quarter ended April 29, 2017. Excluding restructuring charges of 0.01 dollar, the company’s adjusted EPS increased 44 percent to 0.23 dollar compared to 0.16 dollar last year. Total net revenue increased 8 percent to 823 million dollars compared to 762 million dollars last year, while consolidated comparable sales increased 9 percent over the comparable period ending May 6, 2017.

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“The first quarter marked our 13th consecutive quarter of positive comparable sales, leading to an increased operating margin and earnings growth, which exceeded our expectations. We are highly focused on our strategic plan, centered on expanding American Eagle, accelerating Aerie’s growth, elevating the customer experience and delivering strong financial returns,” said Jay Schottenstein, AEO’s Chief Executive Officer in a press statement.

American Eagle’s comparable sales rise 4 percent in Q1

By brand, American Eagle’s comparable sales increased 4 percent and Aerie’s comparable sales increased 38 percent.

Gross profit increased 10 percent to 304 million dollars from 278 million dollars. The gross margin rate increased 50 basis points to 37 percent of revenue compared to 36.5 percent last year. Operating income was 51 million dollars, which includes 1.6 million dollars of restructuring charges, compared to 37 million dollars last year. Adjusted operating income increased 23 percent to 52 million dollars from 42 million dollars last year, leveraging 80 basis points to 6.4 percent as a rate to revenue.

EPS of 0.22 dollar increased 57 percent compared to 0.14 dollar last year. Adjusted EPS of 0.23 dollar increased 44 percent compared to adjusted EPS of 0.16 dollar last year.

During the quarter, the company opened four American Eagle stores and closed two, ending with 935 American Eagle stores, including 118 Aerie side-by-side locations. Additionally, the company opened one Aerie stand-alone store and closed one, ending with 109 Aerie stand-alone stores. Internationally, the company ended the quarter with 217 licensed stores.

Second quarter comparable sales expected to rise mid-single digits

Based on an anticipated comparable sales increase in the mid-single digits, management expects second quarter 2018 EPS to be approximately 0.27 dollar to 0.29 dollar. Last year’s second quarter reported EPS of 0.12 dollar included approximately 0.07 dollar per share of restructuring and related charges. Excluding these items, last year’s second quarter adjusted EPS was 0.19 dollar.

Picture:American Eagle website

American Eagle Outfitters
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