American Eagle holiday sales edged up 1%

American Eagle holiday sales edged up 1%

Teen apparel retailer American Eagle Outfitters has booked an increase in sales for the Christmas period and upped its EPS guidance for the fourth quarter.

Total net revenue for the nine week period ended 3 January edged up 1% to US$893m, compared to $882m in the year ago period. Consolidated comparable sales were down 2%.

The company said it now expects fourth-quarter EPS to be around $0.32 to $0.34 per diluted share, compared to adjusted EPS of $0.27 per share last year, representing growth of 19% to 26%. Its previous EPS guidance was $0.30 to $0.33 per diluted share. The guidance excludes potential asset impairment and restructuring charges.

Jay Schottenstein, interim CEO, said: "I am pleased with the progress we made this holiday season resulting in meaningful margin recovery and expected fourth quarter EPS growth compared to the prior year. In December, we achieved positive comparable sales growth with fewer promotions, as customers responded well to our holiday assortment, as well as new spring arrivals. We expect to close the quarter with inventories in good shape. We look forward to delivering ongoing business improvements and returns to shareholders in 2015."

Stifel analyst Richard Jaffe, noted that despite a recent uptick in sales and margin trends at American Eagle, it is "too soon to declare victory". He added that there is a "lack visibility that these positive trends will continue".

"We believe there is uncertainty surrounding both the merchandise turnaround and the CEO search. Finding a qualified CEO replacement will take time (the search for ex-CEO Hanson took nearly a year) and once a replacement is found, impact by the new CEO will take time to materialise."