American Eagle raises full-year earnings outlook

American Eagle 2Q adj. results meet Wall Street's view; raises full-year earnings forecast

Associated Press

PITTSBURGH (AP) -- American Eagle Outfitters' net income fell 4 percent in the second quarter as the retailer dealt with charges related to the sale of its 77kids business. Its adjusted results met analysts' estimates, and the clothing company raised its full-year earnings guidance.

Lower costs and fewer markdowns helped American Eagle. The Pittsburgh retailer's stock rose more than 6 percent in premarket trading on Wednesday.

American Eagle Outfitters Inc., whose brands include Aerie and its namesake, earned $19 million, or 9 cents per share, for the period ended July 28. That's down slightly from $19.7 million, or 10 cents per share, during the same period a year ago.

Stripping out the impact of the sale of 77kids and restructuring costs, earnings from continuing operations were 21 cents per share.

American Eagle completed the sale of 77kids earlier this month.

Quarterly revenue increased 11 percent to $739.7 million from $669.1 million. Online sales for AEO Direct, which includes ae.com and aerie.com, rose 28 percent.

Analysts surveyed by FactSet expected revenue of $739.4 million.

Revenue at stores open at least a year, which includes AE Direct, climbed 9 percent. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Going forward, American Eagle now expects full-year earnings from continuing operations of $1.33 to $1.36 per share. Its previous forecast called for an adjusted profit of $1.16 to $1.22 per share.

The company anticipates third-quarter earnings from continuing operations of 37 cents to 38 cents per share.

Analysts predict full-year earnings of $1.33 per share and third-quarter earnings of 37 cents per share.

Shares of American Eagle Outfitters added $1.39, or 6.7 percent, to $22.22 before the market open.

The clothing company has more than 1,000 stores in North America.

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