Bloomberg

American Eagle Outfitters Inc. (AEO)  shares were rising after the company reported better-than-expected earnings but lower-than-expected guidance. 

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) recently reported good earnings but underwhelming guidance

American Eagle has risen more than 1% year to date. 

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