American Eagle Profit Plummets 50%, Still Beats View

Teen apparel retailer

American Eagle Outfitters

(AEO) - Get Report

said Wednesday that its first-quarter profit eroded by nearly half when compared with the same period last year, hurt by pricing pressures caused by tight competition.

The Pittsburgh-based company reported first-quarter net income of $22 million, or 11 cents per share, down 50% from $43.9 million, or 21 cents per share, in the year-ago period. Excluding one-time benefits and charges, adjusted profit was 8 cents per share.

On average, Wall Street analysts predicted a profit of 7 cents per share, excluding items.

Overall revenue for the first quarter dropped by 4% to $612 million. On average, analysts expected $612.2 million.

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American Eagle said that same-store sales fell by 10% in the quarter. Same-store sales are considered a key indicator of a retailer's health, since they measure the performance of stores open at least one year.

Looking ahead, the company said it expected second-quarter earnings between 12 cents and 15 cents per share, while analysts predict profit of 15 cents per share.

American Eagle shares rose 18 cents, or +1.2%, in morning trading Wednesday.

We removed shares of AEO from our "Recommended" list back on Sept. 29, when the stock was trading at $15.90. The company has a 2.70% dividend yield, based on last night's closing stock price of $14.48.

The stock has technical support in the $11-$12 price area. If the shares can firm up, we see overhead resistance around the $16-$17 price mark. We would remain on the sidelines for now.

American Eagle Outfitters is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.

AutoZone's Profit Rises 9%, Beating Estimates

Auto parts retailer

AutoZone

(AZO) - Get Report

said Wednesday that its fiscal third quarter profit jumped 9% from last year, as cost-conscious consumers look to repair existing vehicles, rather than opting for new ones.

The Memphis-based company reported fiscal third-quarter net income of $173.7 million, or $3.13 per share, up 9% from $158.6 million, or $2.49 per share, in the year-ago period. Sales for the most recent quarter also rose 9%, to $1.66 billion.

On average, Wall Street analysts expected a profit of $2.89 per share on sales of $1.61 billion.

With new-vehicle sales down a reported 37% during the first four months of 2009, auto-parts sellers like AutoZone stand to benefit, as consumers opt to repair their aging cars.

The company said that inventory rose 6% from last year, as it opened 32 new stores in the U.S. and 10 in Mexico during the most recent quarter.

Despite the earnings beat, AutoZone shares fell $3.27, or -2%, in morning trading Wednesday.

Shares of AZO are within 7% of 52-week highs of $170 a share. The stock has technical support in the $150-$154 price area. If the shares can rebound once again, we see overhead resistance around the $162-$166 price levels.

We do not currently rate this non-dividend paying stock but we do cover the stock and the auto-parts retailing space very closely.

AutoZone does not currently pay a dividend.

Monsanto Slashes Guidance; Shares Fall

Agricultural products maker

Monsanto

(MON)

cut its fiscal third-quarter profit guidance significantly Wednesday, sending its shares plummeting more than 5%.

The St. Louis-based company lowered its fiscal third-quarter guidance to $1.15 a share, down from its prior forecast range of $1.60 to $1.62 a share. On average, Wall Street analysts were expecting $1.61 per share.

Monsanto also said it expects full-year earnings of $4.40 per share, the lowest end of its previous forecast range of $4.40 to $4.50 per share.

The lowered guidance sent Monsanto's shares plummeting $4.36, or -5.1%, in morning trading Wednesday.

We recently removed shares of MON from our "recommended list" on May 13, when the stock was trading at $90.08. The company has a 1.24% dividend yield, based on last night's closing stock price of $85.25.

The stock has near-term technical support in the $77-$79 price area. If the shares can begin to rebound from today's drop, we see overhead resistance around the $91-$94 price area. We would remain on the sidelines for now.

Monsanto is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.

Dollar Tree Hits New All-Time Highs Following Earnings Beat

Dollar Tree

(DLTR) - Get Report

shares hit new all-time highs Wednesday morning, on the heels of its first-quarter earnings report that beat analysts' expectations.

The Chesapeake, Va.-based discount variety store operator reported first-quarter net income of $60.4 million, or 66 cents per share, up nearly 39% from $43.6 million, or 48 cents per share, in the year-ago period.

Net sales in the period jumped 14% to $1.2 billion from $1.05 billion.

On average, Wall Street analysts expected a profit of 60 cents per share, on sales of $1.19 billion.

The company cited higher store traffic for the earnings beat, saying that same-store sales rose 9.2% in the period. Same-store sales are considered a key indicator of a retailer's health, since they measure the performance of stores open at least one year.

The company has benefited from the recent economic slowdown, as cost-conscious consumers flock to discount stores in attempts to stretch their money further.

Looking ahead, Dollar Tree forecast a second-quarter profit range of 47 cents to 51 cents per share, better than analysts' current estimate for 46 cents per share. It also said it expects sales between $1.17 billion and $1.2 billion, which is in-line with analysts' estimates of $1.18 billion.

As for the full fiscal year, Dollar Tree predicted profit of $2.75 to $2.90 per share, on sales of $5.05 billion to $5.15 billion, in-line with analysts' forecasts for $2.85 on sales of $5.11 billion.

Dollar Tree shares hit new all-time highs Wednesday morning, rising $1.99, or +4.5%.

Shares of DLTR are hitting new all-time highs today. This should be good news for competitor,

Family Dollar Stores

(FDO)

as well. If shares of DLTR do pull back at some point, we see near-term technical support in the $40 price area. We do not currently rate this non-dividend paying stock, but we do watch the stock very closely.

Dollar Tree does not currently pay a dividend.

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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.