American Eagle Outfitters'
third-quarter profit jumped as a 21% rise in sales offset weaker margins, but the teen-apparel retailer's earnings forecast for the important holiday period came in shy of Wall Street's target.
For the quarter ended Oct. 29, American Eagle's earnings rose to $73.3 million, or 47 cents a share, from $57.9 million, or 38 cents a share, a year earlier. The results beat analysts' average projection by a penny, according to Thomson First Call. American Eagle's own guidance called for earnings of 45 cents to 46 cents a share.
The company's same-store sales rose 13.6%, while total sales grew to $577.7 million from $479.6 million from a year ago. Gross profit as a percent of sales fell to 46.6% from 48.8%, reflecting a lower merchandise margin, American Eagle said.
For the fourth quarter, the company projects earnings of 73 cents to 75 cents a share, compared with 70 cents a year ago. Analysts had forecast earnings of 76 cents a share for the holiday selling period.
American Eagle shares tumbled 83 cents, or 3.4%, to $23.52 in early trading.