The stock of American Eagle Outfitters (AEO) is up 15% after the clothing retailer delivered better-than-expected quarterly financial results and provided bullish guidance for the holiday shopping season.
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The Pittsburgh-based apparel company reported earnings per share (EPS) of $0.53, which was well ahead of the $0.44 expected on Wall Street. Revenue in the period of $1.36 billion topped the $1.32 billion consensus expectation of analysts. Sales were up 6% from a year earlier.
Looking ahead, American Eagle said that it expects fiscal fourth quarter comparable sales to grow between 8% and 9%, which is about four times better than the 2.1% growth analysts had penciled in for the retailer.
American Eagle’s earnings per share. Source: The Fly
American Eagle’s Full-Year Outlook
Management at American Eagle also said they now expect full-year operating income to be between $303 million and $308 million, up from a previous forecast of $255 million to $265 million. During the most recent third quarter, American Eagle’s operating margin was 8.3%, better than the 7.5% that Wall Street expected.
The fiscal third-quarter print is the first time analysts and investors are seeing a full quarter of impact from American Eagle’s advertising campaign with actress Sydney Sweeney. The company said its comparable sales grew 4% during the quarter, which was better than the 2.7% analysts anticipated.
Management said that the Sydney Sweeney campaign is attracting more customers and creating more attention around the brand.
Is AEO Stock a Buy?
The stock of American Eagle Outfitters has a consensus Hold rating among 12 Wall Street analysts. That rating is based on one Buy, eight Hold, and three Sell recommendations issued in the last three months. The average AEO price target of $16.70 implies 19.83% downside from current levels. These ratings could change after the company’s latest financial results.
