Post-Earnings Insight - American Eagle Outfitters

LONDON, January 2, 2015 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings coverage on American Eagle Outfitters Incorporation (NYSE: AEO). On December 4, 2014, the company reported its financial results for Q3 FY14 (period ended November 1, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on American Eagle Outfitters Inc. (American Eagle Outfitters). During Q3 FY14, the company's adjusted operating income increased 22% Y-o-Y. The Interim CEO at American Eagle Outfitters, Jay Schottenstein, stated that consistent with its previous announcement, in Q3 FY14, the company has delivered higher margins and 16% adjusted earnings growth over Q3 FY13, in a highly challenging and competitive marketplace. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview  

During Q3 FY14, American Eagle Outfitters reported net revenue of $854.29 million compared with $857.31 million in Q3 FY13. For Q3 FY14, the company's GAAP net income declined to $9.04 million, or $0.05 per diluted share, from $24.90 million, or $0.13 in Q3 FY13. Analysts from Bloomberg were expecting the company to report GAAP net income of $10.70 million, or $0.05 per diluted share, on net revenue of $845.81 million in Q3 FY14. American Eagle Outfitters Inc.'s consolidated comparable store sales for the reported quarter decreased by 5% compared to a 5% decline in Q3 FY13. The free research on AEO can be downloaded as in PDF format at:

http://get.Investor-Edge.com/pdf/?c=American%20Eagle%20Outfitters&d=02-Jan-2015&s=AEO

In Q3 FY14, American Eagle Outfitters' gross profit improved 6% Y-o-Y to $315.47 million, while its gross profit margin rose 200 basis points Y-o-Y to 36.9%. Mr. Schottenstein said that in Q3 FY14, the business was managed better as the company was able to reduce markdown rates and control expenses. He added that the company's ongoing priority to strengthen its business is reflected in its restructuring activities and efforts to drive a better customer experience through improved merchandising, customer engagement and building omni-channel capabilities.

American Eagle Outfitter's adjusted operating income for Q3 FY14 rose 22% Y-o-Y to $74.30 million, while its operating margin expanded 160 basis points Y-o-Y to 8.7% as a rate to revenue. The company's selling, general and administrative expenses (SG&A) during the reported quarter fell by 1% Y-o-Y to $204.64 million. As a rate to revenue, SG&A expenses during the reported quarter were flat at 24.0% on a Y-o-Y basis. The reductions in overhead and variable expenses were partially offset by continued investments in new stores and international expansion, as well as increased incentive expense accruals. Sign up and read the free analyst's notes on AEO at:

http://get.Investor-Edge.com/pdf/?c=American%20Eagle%20Outfitters&d=02-Jan-2015&s=AEO

As of November 1, 2014, the company's total cash and investments stood at $280 million compared with $367 million on November 2, 2013. On December 2, 2014, the company closed on a $400 million Asset-Based Credit Facility, replacing the existing $150 million revolver. As of December 2, 2014, the facility was undrawn. The new credit facility carries a 5 year term and provides increased financial flexibility, liquidity and takes advantage of a favorable credit environment.

For Q4 FY14, the company's management expects EPS to be in the range of approximately $0.30 to $0.33, compared to adjusted earnings of $0.27 per diluted share in Q4 FY13. The company's fourth quarter outlook is based on a slight decline in revenue and a mid-single-digit decline in comparable sales, and excludes potential asset impairment and restructuring charges.

Stock Performance 

On the day following the earnings release, December 05, 2014, American Eagle Outfitters' stock plummeted 13.76% to end the session at $11.91. Although the stock has moved both ways since then, the gains have outweighed the losses so far. On the last close, Wednesday, December 31, 2014, the stock finished at $13.88, down 0.07%, after vacillating between $13.88 and $14.29. A total of 3.33 million shares were traded, which was below its three months average volume of 5.62 million shares. Over the last one month and since the start of 2014, the company's shares have lost 1.56% and 3.61%, respectively. However, the stock has advanced 1.83% in the previous three trading sessions. Shares in American Eagle Outfitters closed above their 50-day and 200-day moving averages of $13.34 and $12.40, respectively. Furthermore, the stock traded at a PE ratio of 31.02 and has a Relative Strength Index (RSI) of 56.42. Visit Investor-Edge and access the latest research on AEO at:

http://get.Investor-Edge.com/pdf/?c=American%20Eagle%20Outfitters&d=02-Jan-2015&s=AEO

Sneak Peek to Corporate Insider Trading 

In the last one month, American Eagle Outfitters 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://get.Investor-Edge.com/pdf/?c=American%20Eagle%20Outfitters&d=02-Jan-2015&s=AEO

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