American Eagle (AEO) matched fourth-quarter estimates, but management guided higher for the first quarter of fiscal year 2011.
Company Description
American Eagle Outfitters is a specialty retailer of all-American casual apparel, accessories, and footwear for men and women between the ages of 16 and 34. The company is focused on several core brand and merchandising strategies to differentiate the company from competition, improve profitability and increase sales.
Fourth-Quarter Results
Sales increased 7% to $972 million with a comp-store sales gain of 5%. The retailers also reported earnings per share of $0.33, matching the Zacks Consensus Estimate.
American Eagle disclosed that it would close its money-losing 28-store Martin + Osa outlets by July, citing the brand’s poor performance.
Looking ahead to the first quarter of fiscal 2011, the company expects earnings of between 15 cents and 17 cents a share, up from 11 cents a share in the year-ago quarter.
EPS Estimates Climbing Higher
Analysts liked what the saw from the AEO’s fourth-quarter report and first-quarter guidance.
In the last month, the Zacks Consensus Estimate for fiscal 2011 is up 11 cents, or 10.4%, to $1.17, and consensus estimates for fiscal 2012 are up 15 cents, or 12.1%, to $1.39.
Favorable Industry Comps
The Zacks Rank #1 stock has a return on equity of 10.6%, above the industry average of 8.0%. Its trailing twelve-month net profit margin is 5.7%, versus 1.8% for its peers. And, AEO’s dividend yield of 2.7% looks really good when compared to the industry average of 0%.
