NEW YORK (TheStreet) -- Shares of American Eagle Outfitters (AEO) are climbing higher by 7.67% to $13.47 at the start of trading on Wednesday, after the teen apparel retailer raised its third quarter earnings per share guidance.
American Eagle is now expecting its 2014 third quarter adjusted earnings to be 22 cents per diluted share, compared to its previous guidance range between 17 cents and 19 cents per diluted share.
Analysts polled by Thomson Reuters expected EPS of 18 cents for the quarter.
"Third quarter earnings exceeded our expectations and margins were ahead of last year. We are encouraged by our ability to reduce promotional activity, particularly given the challenging and highly promotional retail climate," the company's interim CEO Jay Schottenstien said.
However, the company noted that its revenue "declined slightly" for the latest quarter due to a 5% decrease in comparable store sales.
Separately, TheStreet Ratings team rates AMERN EAGLE OUTFITTERS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERN EAGLE OUTFITTERS INC (AEO) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
You can view the full analysis from the report here: AEO Ratings Report