Count Sterne Agee among the bulls on American Eagle. The firm, which has a buy rating on the stock with a $27 price target, is expecting in-line results for the quarter and it believes the company did well over the first big shopping weekend of gift-giving season.
"Our holiday checks this weekend suggested AEO sales were off to a good start with promotional levels similar to last year," the firm said. "Under new management the Company has significant top- and bottom-line drivers with inventory management a key focus."
Sterne Agee said it's expecting American Eagle to provide a forecast for earnings of 55 cents a share for its fiscal fourth quarter ending in January, a view that's in line with the current consensus.
"We are projecting comps up 3% against 10% for Q4 LY, with holiday comps last year up 12%," the firm said. "While comps were strong last year, excess inventories led to gross margins under pressure at 35.2%, down 520 bp [basis points] Y/Y. We project gross margins to rise significantly in Q4 to 41.5%, up 630 bp. Our checks of Black Friday weekend sales suggested a good start to the period with its promotions equal to last year at 40% off through Sunday."Check out TheStreet's quote page for American Eagle Outfitters for year-to-date share performance, analyst ratings, earnings estimates and much more. Other companies slated to report their numbers on Wednesday include Coldwater Creek (CWTR), Express Inc. (EXPR), Fresh Market (TFM), Guess? (GES), Jos. A. Bank Clothiers (JOSB), La-Z-Boy (LZB), Movado Group (MOV), New York & Co. (NWY), Pall Corp. (PLL), and TiVo (TIVO). Wednesday's economic calendar features the Mortgage Bankers Association's weekly application activity index at 7 a.m. ET; new home sales for October at 10 a.m. ET; weekly crude inventories at 10:30 a.m. ET; and the release of the Federal Reserve's beige book survey on economic conditions for October at 2 p.m. ET. And finally, shares of Green Mountain Coffee Roasters (GMCR) were perking up in Tuesday's late trades after the company blew past Wall Street's expectations for its fiscal fourth-quarter results. The stock was last quoted at $35.40, up more than 22%, on volume of more than 5 million, according to Nasdaq.com. Green Mountain reported a non-GAAP profit of $101 million, or 64 cents a share, for the September-ended period on revenue of $946.7 million. The average estimate of analysts polled by Thomson Reuters was for earnings of 48 cents a share in the quarter on revenue of $902.7 million.
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