The stock initially fell 1.68% in early trading Wednesday, but then settled up 0.53% to $19.13 a share by mid morning.
Wall Street analysts had expected the company to guide for earnings of 47 cents a share for the fourth quarter, but American Eagle said it expects EPS to come in between 40 and 42 cents. Management said it expects same-store-sales growth for the quarter in the mid single digits, and revenue growth in the low single digits.
The retailer posted third-quarter earnings of 48 cents a share, beating Wall Street estimates of 47 cents. Net income was $85.5 million. Revenue missed expectations, coming in at $1 billion vs. estimates of $1.02 billion.
"I am proud to announce another outstanding performance this period for AEO, marking record sales and our first $1 billion third quarter," said CEO Jay Schottenstein. He added, "American Eagle and Aerie had extremely well-executed back-to-school and fall seasons, fueling strong sales across stores and double-digit growth in digital, on lower promotional activity across channels."
Low promotional or discounting activity is usually a sign of strength and health for a retailer, but American Eagle is just one of several companies across many segments of U.S. retail to post strong earnings but weak guidance. Kohl's Corp. (KSS - Get Report) recently reported good earnings but underwhelming guidance.
American Eagle has risen more than 1% year to date.