Earnings Briefing - American Eagle Outfitters

LONDON, August 29, 2014 /PRNewswire/ --

Investor-Edge.com has issued free earnings briefing on American Eagle Outfitters Incorporation (NYSE: AEO). The company featured in the headlines on Wednesday, August 20, 2014 after declaring its results for the second quarter ended August 02, 2014. During Q2 2014, the company's diluted EPS declined $0.07 Y-o-Y and its net revenue decreased 2% Y-o-Y. Our free coverage report can be accessed at:

http://www.investor-edge.com/register

Earnings Overview  

During Q2 FY14, American Eagle Outfitters Inc. reported net revenue of $710.59 million, compared with $727.31 million in the prior year quarter. For Q2 FY14, the company's diluted earnings decreased to $0.03 per share, from $0.10 in the year ago period. Analysts from Bloomberg were expecting the company to report flat diluted EPS and net revenue of $689.68 million in Q2 FY14. American Eagle Outfitters Inc.'s consolidated comparable store sales for the reported quarter decreased by further 7%, following a 7% decline in Q2 FY13. The free research on AEO can be downloaded as in PDF format at:

http://www.Investor-Edge.com/AEOFreeReport

During Q2 FY14, the company's gross profit declined 3% Y-o-Y to $237.55 million from $245.49 million in the prior year quarter, while the gross profit margin fell by 40 basis points Y-o-Y to 33.4% during the quarter. The company's gross margin reflected the effect of de-leverage of buying, occupancy and warehousing costs on negative comparable sales, which was largely offset by favourable merchandise and design costs and a slight improvement in the markdown rate. Further, in Q2 FY14, American Eagle's operating income fell by 59% Y-o-Y to $12.05 million, while its operating margin decreased 240 basis points to 1.7%. The company's selling, general and administrative expenses during the reported quarter increased 2% or $3.74 million Y-o-Y to $190.08 million. As a rate to revenue, SG&A expenses during the reported quarter increased 110 basis points Y-o-Y to 26.7%, driven by investments in advertising, international growth, factory stores and omni-channel initiatives, though the increase was partially offset by reductions in overhead and variable expenses.

Commenting on the company's quarterly results, Jay Schottenstein, Interim CEO of American Eagle Outfitters Inc., stated in the press release that the company's results came slightly above  its expectations, but do not reflect the company's potential. He added that the company made significant progress on its priorities to build a sustainable path to higher profitability. Mr. Schottenstein stated that the company successfully cleared its spring and summer merchandise and entered the second half of the year in a good inventory position and made progress on merchandise improvements, which will ramp up through the holiday season. He added that the company remains vigilant on expense management to achieve strategic initiatives, significant to the company's future success. Mr. Schottenstein remained confident that the company will achieve stronger operating results and deliver increasing shareholder value.

American Eagle Outfitters Inc.'s total merchandise inventories for the quarter ended August 02, 2014 declined 15% Y-o-Y to $393.31 million, from $461.08 million in the preceding year quarter. In Q2 FY14, the company's capital expenditures totaled $74 million. For FY 2014, the company continues to expect capital expenditures of approximately $230 million, while for FY15, the company expects capital spending of approximately $150 million. During Q2 FY14, Pittsburgh, Pennsylvania-based retailer opened 20 new stores. As of August 02, 2014, the company's total cash and investments stood at $263 million compared with $405 million at the end of the prior year quarter. For Q3 FY14, the company's management expects EPS to be in the range of approximately $0.17 to $0.19, compared to adjusted earnings of $0.19 per diluted share in Q3 FY13. The company's third quarter outlook is based on a mid single-digit decline in comparable sales, and excludes potential asset impairment and restructuring charges. Sign up and read the free analyst's notes on AEO at:

http://www.Investor-Edge.com/AEO-29082014

Stock Performance 

On Wednesday, August 20, 2014, the day of the earnings release, shares in American Eagle Outfitters Inc. surged 11.99% to end the session at $12.98. On the last close, Thursday, August 28, 2014, shares of the company finished the day 1.13% lower at $14.03. The stock vacillated between $13.68 and $14.08 during the session. A total of 7.60 million shares were traded, which was above its three months average volume of 5.02 million shares. Over the previous three trading sessions and in the last one month, shares in American Eagle Outfitters Inc. have gained 2.71% and 36.48%, respectively. However, the stock has declined 2.57% from the beginning of 2014. Shares in American Eagle Outfitters Inc. are trading above their 50-day and 200-day moving averages of $11.30 and $12.76, respectively. Furthermore, the company's stock traded at a PE ratio of 33.33 and has a Relative Strength Index (RSI) of 82.42. Visit Investor-Edge and access the latest research on AEO at:

http://www.Investor-Edge.com/AEOEarningsCoverage

Sneak Peek to Corporate Insider Trading 

In the last one month, American Eagle Outfitters Inc. has not reported any share transactions by insiders to the U.S. Securities and Exchange Commission (SEC). Complimentary in-depth research on AEO is available at:

http://www.Investor-Edge.com/AEOInsiderTrading

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