American Eagle Outfitters'(AEO Quote) fourth-quarter profit declined 6% as higher markdowns during a difficult holiday period weighed on the retailer's margins.
The teen-apparel seller said Wednesday that its earnings slipped to $140.5 million from $150.2 million a year earlier. Earnings per share for the quarter ended Feb. 2 were flat at 66 cents, reflecting fewer shares outstanding. The per-share results matched Thomson Financial's average analyst estimate, but were better than American Eagle's forecast of 64 cents to 65 cents. Shares of American Eagle recently were up $1.13, or 6.6%, to $18.38. The company's quarterly sales rose to $995.4 million from $973.4 million the prior year. Same-store sales, which factor out an extra week in the prior-year selling period, fell 2% in the quarter. The decline in same-store sales, or sales at stores open at least a year, reflects a holiday period that saw consumers pulling back in spending. Aside from American Eagle, rivals like Gap(GPS Quote), Abercrombie & Fitch(ANF Quote) and Pacific Sunwear(PSUN Quote) all reported drops in same-store sales for the period. With shoppers scarce, retailers were forced to heavily discount to move products off their shelves. For its part, American Eagle posted a drop in gross margins to 45.7% from 47.9% a year earlier, a decline the company attributed to higher markdowns. For the first quarter, American Eagle reiterated its forecast given last week for earnings of 25 cents to 27 cents a share, which would be a drop from 35 cents a share a year earlier. The retailer said the forecast reflects a drop in same-store sales for the remainder of the quarter and a higher markdown rate compared with last year.- Loading Comments...
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