American Eagle Outfitters : Post Earnings Coverage as American Eagle Outfitters Earnings Per Share Increased 17%

Upcoming AWS Coverage on Francesca's Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 6, 2016 / Active Wall St. announces its post-earnings coverage on American Eagle Outfitters, Inc. (NYSE: AEO). The Company released its third quarter fiscal 2016 financial numbers on November 30, 2016. The apparel retailer reported a smaller-than-expected rise in Same-store sales, citing a tough retail climate. Following its Q3 FY16 earnings results, American Eagle offered weak guidance. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of American Eagle Outfitters' competitors within the Apparel Stores space, Francesca's Holdings Corp. (NASDAQ: FRAN), will report its Q3 FY16 financial results on Tuesday, December 6, 2016, before the market opens, and will hold a conference call to discuss these results the same day at 8:30 a.m. ET. AWS will be initiating a research report on Francesca's Holdings in the coming days.

Today, AWS is promoting its earnings coverage on AEO; touching on FRAN. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=AEO

http://www.activewallst.com/registration-3/?symbol=FRAN

Earnings Reviewed

For the three months ended on October 29th, 2016, American Eagle's total net revenue increased 2% to $941 million from $919 million in Q3 2015; surpassing the $940 million market forecasts. Consolidated comparable sales increased 2%, following a 9% increase last year, but falling short of analysts' estimates for an increase of 2.9%.

For Q3 2016, the company's total gross profit increased 3% to $378 million from $368 million last year, while gross margin rose 20 basis points to a rate of 40.2%. The increase was the result of an improved IMU, partially offset by a slight increase in markdowns. Operating income increased 8% to $118 million in the reported quarter from $109 million last year, while the operating margin expanded by 70 basis points to 12.6% as a rate to revenue.

American Eagle's Q3 2016 net income totaled $75.8 million, or $0.41 per share, up from $74.1 million, or $0.38 per share, for the same period last year. The earnings numbers matched analysts' forecasts of $0.41 per share. The company's earnings per share were $0.41, an increase of 17% from earnings per share from continuing operations of $0.35 in Q3 2015.

Inventory

At the end of Q3 2016, American Eagle's total merchandise inventories increased 3% to $493 million, with ending units down 5%. Q4 2016 ending inventory at cost is expected to be up in the high-single digits, with units expected to be down in the mid-single digits.

Balance Sheet

For Q3 2016, American Eagle's capital expenditures totaled $47 million and $108 million for the year-to-date period. The company expects FY16 capital expenditures to be approximately $160 million, with nearly half related to store remodeling projects and new openings, and the remaining half supporting digital and omni-channel investments. As of October 29th, 2016, American Eagle had total cash of $292 million compared to $363 million last year. Lower cash was the result of $212 million in share buybacks in Q4 2015. The company returned $92 million in cash dividends and spent $152 million in capital expenditures over the past year.

Store Information

In Q3 2016, the company opened 4 American Eagle's stores, 6 aerie stores, and 1 Tailgate store. In the same period, 3 American Eagle's stores were closed. Additionally, American Eagle opened 8 licensed locations, while closing 3 licensed locations. The company said it is on track to close approximately 25 to 30 underperforming stores this year upon natural lease expiration.

Outlook

American Eagle is expecting Q4 2016 earnings per share in the range of $0.37 to $0.39 based on comparable sales in the range of flat to a low single digit increase The company's earnings forecast is below analysts' consensus of $0.46 per share, while market expects same-store sales to increase by 3.8%.

Stock Performance

On December 05, 2016, American Eagle Outfitters' share price finished yesterday's trading session at $16.92, rising 4.64%. A total volume of 7.29 million shares exchanged hands, which was higher than the 3 months average volume of 5.16 million shares. The stock has advanced 7.31% and 10.47% in the last six months and twelve past months, respectively. Furthermore, since the start of the year, shares of the company have gained 11.71%. The stock is trading at a PE ratio of 13.22 and has a dividend yield of 2.96%.

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SOURCE: Active Wall Street