NEW YORK - American Eagle Outfitters Inc. (NYSE: AEO ) reported third-quarter earnings that slightly beat expectations, but revenue fell short of estimates, sending shares tumbling in after-hours trading.
The apparel retailer posted adjusted earnings per share of $0.48, edging past the analyst consensus of $0.47. However, revenue of $1.3 billion missed the $1.31 billion estimate.
Total (EPA: TTEF ) comparable sales increased 3% YoY, with Aerie comparable sales rising 5% and American Eagle comparable sales growing 3%.
Gross profit declined 3% to $527 million, while gross margin contracted to 40.9% from 41.8% last year due to increased markdowns and expense deleverage related to the retail calendar shift.
"Building on our positive performance in the first half of the year, third quarter results provide another proof point of the effectiveness of our Powering Profitable Growth Plan," said Jay Schottenstein, AEO's Executive Chairman and CEO.
For the fourth quarter, American Eagle expects comparable sales to be up approximately 1%, with total revenue down 4% including calendar shift impacts. The company forecasts Q4 operating income of $125-$130 million.
For fiscal 2024, the company now projects adjusted operating income of $428-$433 million, representing mid-teens growth from $375 million in fiscal 2023.
"We have entered the holiday season well positioned, with our leading brands offering high-quality merchandise, great gifts and an outstanding shopping experience across channels," Schottenstein added.
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