American Eagle (NYSE:AEO) shares took a beating shortly after Thursday’s open after the company reported third-quarter earnings in which it issued weak holiday guidance and cut its full-year forecast. The company said it’s contending with value-seeking consumers who are only willing to spend during key shopping moments.
The apparel retailer narrowly missed Wall Street’s expectations on the top line, but beat on the bottom line.
American Eagle reported earnings per share of 48 cents adjusted vs. 46 cents expected, on revenue of $1.29 billion vs. $1.30 billion expected
The company’s reported net income for the three-month period that ended Nov. 2 was $80 million, or 41 cents per share, compared with $96.7 million, or 49 cents per share, a year earlier. Excluding one-time charges related to restructuring and impairment costs, American Eagle posted an adjusted profit of 48 cents per share.
Sales dropped to $1.29 billion, down about 1% from $1.3 billion a year earlier.
While it was narrow, experts say Wednesday’s miss represents the third quarter in a row that American Eagle has not met Wall Street’s sales targets.
For its holiday quarter, American Eagle is expecting comparable sales to be up around 1%, with total sales down about 4%, including an $85 million impact from having one fewer selling week and a later start to the holiday shopping season.
AEO opened Thursday yielded $2.93 or 14.3%, to $17.61.
