US: American Eagle Outfitters doubles Q2 profit
- Q2 profit jumps 104% to $19.7m from $9.66m
- Total sales increased 3.7% to $675.7m
- Same-store sales were flat with last year
Teen apparel retailer American Eagle Outfitters Inc has more than doubled its second quarter profit, but warned higher cotton costs are likely to pressure second-half merchandise margins.
"During the quarter, we achieved improved performance on the top line and EPS within our range of expectations," said CEO Jim O'Donnell. "We managed our business prudently and made significant strides on our longer-term initiatives which are laying the foundation for future growth.
"Importantly, a renewed focus on our key item businesses and improved merchandising are delivering positive results, with the back-to-school season off to an encouraging start."
Although the company has tempered its sales expectations for the second half, particularly during non-peak shopping periods, sales are expected to strengthen from the first half of the year, driven by investments in key items.
The back-to-school trend is positive and promotional activity is on plan, American Eagle Outfitters said.
But it lowered its full-year earnings to between $0.85 and $0.95 per share, coming in below the $1.02 per share booked the year before. And it expects third quarter earnings to be in a range of $0.22 to $0.27 per share, down from last year's $0.29 per share.
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