American Eagle posts upbeat Q4 and FY15 results

American Eagle Outfitters has reported EPS of 0.42 dollar for the fourth quarter ended January 30, 2016, a 17 percent increase from EPS from continuing operations of 0.36 dollar for the comparable quarter last year. The company also announced EPS from continuing operations of 1.09 dollars for the year ended compared to adjusted EPS from continuing operations of 0.63 dollar last year, a 73 percent increase.

Commenting on the results, Jay Schottenstein, CEO said, “Initiatives to strengthen our merchandise and improve operational execution fueled strong results in 2015. The American Eagle brand delivered solid growth and Aerie exceeded our expectations. As broadly reported, the fourth quarter was a challenging period for the apparel industry due to a number of macro factors. Despite this, we achieved sales growth and a modest increase in operating income.”

Fourth quarter and FY15 results

Total net revenue increased 3 percent to 1.11 billion dollars from 1.07 billion dollars last year. Consolidated comparable sales increased 4 percent, compared to flat comparable sales last year. Gross profit increased 3 percent to 388 million dollars and the gross margin rate remained flat to last year at 35.1 percent of revenue.

Total net revenue for the fiscal year increased 7 percent to 3.52 billion dollars from 3.28 billion dollars last year. Consolidated comparable sales increased 7 percent, compared to a 5 percent decrease last year. Gross profit increased 13percent to 1.3 billion dollars and leveraged 180 basis points to 37 percent as a rate to revenue.

In the quarter, the company closed 21 AE and 1 Aerie standalone stores. Internationally, the company opened 15 licensed stores during the quarter, including the first stores in Bahrain and Oman. Since the beginning of fiscal 2014, the company has closed 76 AE and 26 Aerie stores. The company continues to expect to meet its goal of closing 150 stores by the end of fiscal 2016.

First quarter outlook

Based on an anticipated mid-single digit increase in comparable sales, management expects first quarter 2016 EPS to be approximately 0.17 dollar to 0.19 dollar.