Why American Eagle Outfitters Shares Slipped
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What: Shares of American Eagle Outfitters were getting clipped today, falling as much as 11% after an underwhelming earnings report.
So what: Like rival Aeropostale, which reported earlier this week, American Eagle disappointed in its fourth-quarter guidance. The teen apparel retailer actually beat estimates by a penny with an EPS of $0.19 for the third quarter, while revenues fell 5.8% to $857.3 million, but that was better than the consensus at $842.4 million. Same-store sales, meanwhile, were down 5% in the quarter. CEO Robert Hanson said the financial performance was "clearly unsatisfactory" and promised to focus on high-margin areas to drive profit growth again.
Now what: For the fourth quarter, American Eagle sees earnings per share of just $0.26-$0.30, well below estimates at $0.39, and expects another mid-single-digit decline in same-store sales. While it may be faring better than key competitors like Aeropostale and Abercrombie & Fitch, which have seen sharper slides in sales, investors have to wonder if these mall staples will ever get those fleeing customers back. The rise of H&M and other fast fashion brands has put pressure on the teen retailers, and clearly their attempts to adapt have not taken hold. With sales falling fast, it's hard to recommend getting behind any of them.
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The article Why American Eagle Outfitters Shares Slipped originally appeared on Fool.com.
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