Tuesday, March 1, 2011

American Eagle Outfitters Inc. (NYSE: AEO): Q4 Earnings Preview 2010

American Eagle Outfitters Inc. (NYSE: AEO) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, March 9, 2011. Analysts, on average, expect the company to report earnings of 43 cents per share on revenue of $922.97 million. In the year ago quarter, the company reported earnings of 33 cents per share on revenue of $971.98 million.

American Eagle Outfitters, Inc. operates as an apparel and accessories retailer in the United States and Canada.

In the preceding third-quarter, the Pittsburgh, Pennsylvania-based company's net income was $33 million, or 17 cents a share, compared with a profit of $59.2 million, or 28 cents a share, in the comparable quarter last year. On an adjusted basis, the company earned 29 cents a share in the latest quarter. Revenue increased to $752 million, from $736 million. Analysts, on average, expected the company to report earnings of 29 cents per share on revenue of $748.91 million.

The apparel stores sector has been experiencing a period of recovery lately as consumer spending continues to strengthen. However, higher-end brands like American Eagle Outfitters Inc. have been hurt by customers shifting to lesser brands in search of lower price points.

Last month, the company said that total sales for the fourth quarter ended January 29, 2011 decreased 4 percent to $916 million from $956 million for the same period last year. Comparable store sales decreased 7 percent for the quarter, compared to a 5 percent increase for the same period last year. Revenue at stores open at least a year is a key indicator of a retailer's health, because it excludes the effects of stores that open or close during the year. January is typically retailers' slowest month of the year.

The company said that it expects fourth quarter earnings to be on the high end of the previously announced guidance of $0.41 to $0.43 per share.

Since opening its first stores outside North America in Dubai and Kuwait last year, American Eagle Outfitters has been steadily pursuing its international strategy. The company has additional agreements for stores in China, Hong Kong, and Israel, as well as plans for other countries. In December 2010, the company announced plans to open retail stores in Japan as part of its ongoing efforts to expand in international markets. The first store is slated to open in Tokyo's legendary Harajuku shopping district in the first half of 2012.

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