A shopper walks past an American Eagle store in the mall.
Tim Boyle | Getty Images News | Getty Images
Shares of American Eagle fell Thursday after the company reported second-quarter tax revenue below analysts ’estimates as its e-commerce business slowed compared to the previous year.
Its shares fell 11% in premarket trading in the news.
The American Eagle’s gains, however, exceeded expectations. The company, which also owns lingerie brand Aerie, said the reduction in promotions and controlled costs helped fuel its profitability during the summer months.
“We’ve learned that you can still move a lot of products without discounts,” CEO Jay Schottenstein said in a phone interview. “Our stores are very productive.”
The following explains how the American Eagle did during the quarter ended July 31 compared to what Wall Street predicted, using Refinitiv estimates:
- Earnings per share: 60 cents adjusted against 55 cents expected
- Revenue: $ 1.19 billion compared to the expected $ 1.232 billion
American Eagle’s net income rose to $ 121.5 million, or 58 cents a share, from a loss of $ 13.8 million, or 8 cents a share, a year earlier. Excluding unique items, it earned 60 cents per share, ahead of the 55 cents analysts had been looking for.
Revenue grew 35%, from $ 883.5 previously to $ 1.19 billion. This fell short of analysts ’forecast of $ 1.232 billion.
Revenue of $ 336 million was up 34% from the previous year. American Eagle’s revenue increased 35%, to $ 846 million, during the same period.
Digital sales fell 5% from 2020 levels. Last summer, many consumers opted to shop online instead of visiting stores due to the Covid pandemic. Digital revenue rose 66 percent on a two-year basis, the American Eagle said.
The company offered no prospects for the next quarter or year. However, he said he is still on track to achieve his previous three-year goals. Prosecutor 2023, American Eagle expects revenue to reach $ 5.5 billion and Aerie to grow to a record $ 2 billion.
BMO Capital Markets analyst Simeon Siegel said investors are focusing on future trends as companies face accumulated demands and supply chain lag.
American Eagle is in full swing back in school and manufacturing and shipping restrictions have been a cloud hanging in the industry. Rival Abercrombie & Fitch late last month reported quarterly sales that were lower than analysts ’expectations as they faced transportation delays that have left inventory behind and some store shelves.
Schottenstein said American Eagle has been investing in its supply chain for years to be more agile and less dependent on overseas factories.
“We know there are problems, but we believe what we invest will differentiate us in the next second half,” he said.
At the close of the market on Wednesday, American Eagle shares have risen nearly 50% so far. The company’s market cap is $ 5.04 million.