American Eagle (AEO) reported earnings on Wed 23 August 2017 (b/o)

** charts after earnings **

 

American Eagle beats by $0.03, beats on revs; guides Q3 EPS in-line

• Reports Q2 (Jul) adj. earnings of $0.19 per share, $0.03 better than the Capital IQ Consensus of $0.16; revenues rose 2.7% year/year to $845 mln vs the $823.84 mln Capital IQ Consensus. 
• Consolidated comparable sales were up 2% vs. guidance calling for a flat to low single digit decline, following a 3% increase last year.
• Gross profit of $294 million compared to $307 million last year with a gross margin rate of 34.9% to revenue compared to 37.3% last year, a 240 basis point decline. The margin declined primarily due to increased promotional activity. Additionally, shipping costs and rent deleveraged. Total ending inventories at cost increased 3% to $433 million.
• Co issues in-line guidance for Q3, sees EPS of 0.36-0.38 vs. $0.38 Capital IQ Consensus. Based on anticipated comparable store sales in the range of flat to up low single digit.  
• "In the second quarter, we achieved sales and earnings above our expectations in a challenging retail environment. Sales trends improved and I'm proud of the continued growth in jeans, bottoms, women's apparel and Aerie, with encouraging signs in men's tops beginning to emerge. Our brands are strong and we have significant opportunity for further growth. I'm optimistic as we enter the second half of the year, and we remain focused on delivering product innovation, strengthening customer engagement and improving profit flow-through."