Aeropostale, American Eagle Boost Guidance

Strong April same-store sales have both teen retailers raising estimates.
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Teen retailers

Aeropostale

(ARO)

and

American Eagle Outfitters

(AEOS)

each lifted first-quarter earnings guidance after April same-store sales results came in higher than expected Wednesday.

New York-based Aeropostale now expects to earn 9 cents a share in the first quarter, up from a prior estimate of 7 cents a share, which is also the Wall Street consensus. (The company had a 3-for-2 stock split on April 26, which affected its prior earnings guidance. Before the split, the company had expected to earn 11 cents a share.)

Aeropostale posted a 19.3% spike in April same-store sales -- well above an 8% increase in the same period of 2003 -- and a 18.9% increase in first-quarter same-store sales. In the first-quarter of 2003, same-stores sales rose 1.8%.

Analysts polled by Thomson First Call were expecting a 9% increase in Aeropostale's April same-store sales, on average.

Aeropostale said total sales jumped 48.6% in April to $57.2 million, and surged 49.5% in the first quarter to $167.7 million. The company cited strengths in its merchandise assortment and an increase in transactions. The company will report quarterly earnings on May 20.

Shares of the company were moving up 64 cents, or 2.7%, to $24.45 in after-hours trading, after having added 75 cents, or 3.3%, to $23.81 in the regular session.

Meanwhile, American Eagle said April same-store sales increased 8.3%, while first-quarter same-store sales were up 9.3%. Analysts polled by Thomson First Call were expecting a 5% gain in April same-store sales.

As a result, the company now expects to earn 32 cents to 33 cents a share in the first quarter, compared with the Wall Street consensus for 28 cents a share. Previously, American Eagle had expected to earn 25 cents to 30 cents a share. The company earned 9 cents a share in the year-earlier quarter.

Total April sales rose 17.2% to $115.1 million, while total first-quarter sales were up 19.9% at $350 million.

The company cited higher merchandise margins for the upward guidance. American Eagle will report quarterly earnings on May 13.

Shares of the Warrendale, Pa.-based company were moving up 72 cents, or 2.7%, to $27.75 in after-market trading; they rose 84 cents, or 3.2%, to $27.03 in the regular session.