US: American Eagle reports "highly disappointing" Q4
- Q4 net profit slumps to $10.5m
- Margins narrow to 29.4%
- Sales fall 6.7%
American Eagle said business conditions remain “challenging” in Q1
Teen apparel retailer American Eagle Outfitters has reported a "highly disappointing" fourth-quarter after earnings slumped and margins narrowed.
In the three months ended 1 February, the company reported a net profit of US$10.5m. This compared to earnings of $94.8m a year earlier.
Interim CEO Jay Schottenstein said the results in 2013 were "highly disappointing" and that while tough macro conditions persisted in its retail sector, the firm's merchandise and overall customer experience fell short of expectations.
"We're taking steps to bring greater focus and excitement to our product offering and better engage our core customers," he said.
"Our brands remain incredibly strong and I'm confident in our ability to execute the strategic plan and resume long-term profitable growth."
Nonetheless, gross margin narrowed in the quarter to 29.4% from 41.2%, in part due to increased discounting. Sales also dropped, by 6.7% to $1.04bn.
For its first quarter outlook, the company said business conditions remain "challenging", with severe winter weather contributing to weak demand.
Based on a high single-digit decline in comparable sales, American Eagle said it expects first quarter EPS to be around break-even compared to adjusted EPS of $0.18 last year.
FBR & Co analyst, Susan Anderson, said: "While we like AEO's omnichannel/supply chain initiatives, we believe the business will be under pressure in the near term given the competitive and promotional teen environment.
"We remain on the sidelines until we see margin and SSS stabilization or a more attractive valuation. We believe that the stock will be under pressure from today's results."
In pre-market trading, shares were down 5% to $14.21 at 09:17 EDT.
Some 190 companies have now signed the Accord on Fire and Building Safety in Bangladesh following the collapse of the Rana Plaza factory building in Dhaka, which killed more than 1,100 people in 2013....
American Eagle Outfitters, Inc. - Strategy and SWOT Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and ...
This company profile, SWOT and financial report contains in depth information and data about American Eagle Outfitters and its operations. The profile contains a company overview, key facts, major pro...
Introduction American Eagle Outfitters has long been seen as the go-to for young adults seeking affordable fashion in the US. However, as the overall apparel retail market has struggled, so too have ...
Fox’s main goal is to expand its product portfolio by adding more brands under the Fox umbrella. Fox Group operates 309 stores under the Fox network (162 stores), Laline (84) Billabong (27), Fox Home ...
- Expensive US dollar hitting H&M sourcing costs
- Enthusiasm for tech in outdoor apparel on rise
- 2015: Welcome to the new fashion consumer
- Apparel industry gains traction says IAF chief
- Performance apparel set for continued growth
- Kanati pulls production out of Pakistan
- Sears Holdings cuts 115 corporate jobs
- H&M Q4 mixed but plans 400 new stores
- JC Penney to close 10 Foundry stores
- UK clothing sales see strongest rise in two years
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Outdoor performance apparel: peaks, valleys, and green fields
- Apparel Retail: Top 5 Emerging Markets Industry Guide
- Li & Fung Limited (494) - Financial and Strategic SWOT Analysis Review
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead