Updated from 2:49 p.m. EDT
American Eagle Outfitters
(AEO - Get Report)
reported "disappointing" fourth-quarter results to end a difficult year, the retailer's CEO said Wednesday, as revenue came up short of expectations.
The Pittsburgh-based apparel shop reported fourth-quarter net income of $32.7 million, or 16 cents a share, falling from $140.5 million, or 66 cents a share, in the year-ago period. Excluding one-time items, American Eagle would have notched a profit of 19 cents a share.
American Eagle said that revenue fell 9% from a year ago to $905.7 million. On average, analysts were looking for a profit of 19 cents a share on revenue of $911.7 million, according to Thomson Reuters.
"The fourth quarter proved to be a disappointing conclusion to an extremely challenging year," said CEO Jim O'Donnell. "In response to sharply lower demand in the fourth quarter, we increased unplanned promotions, enabling us to successfully clear through inventory. While our earnings were clearly not up to our standards or our potential, our business remains profitable and financially healthy."
Based on its current view of sales trends, American Eagle said it anticipates first-quarter earnings to be in a range of 4 cents to 7 cents a share, compared with a profit of 21 cents a share in the same quarter last year. This guidance excludes the possibility of additional losses related to investment securities, the company said. Wall Street is looking for a profit of 6 cents a share.
"Looking ahead, we cannot accept this kind of performance, recession or not," O'Donnell added. "As such, we are vigorously pursuing major improvements within all of our brands, while maintaining a conservative approach toward inventory investments, capital spending and operating expense."
After losing ground early in the session, shares of American Eagle finished with a gain of 1.3% at $9.69. Among its competitors,
Abercrombie & Fitch
(ANF - Get Report)
was higher by 4.2%, and
(GPS - Get Report)
shares added 2.6%.