American Eagle Outfitters (AEO) has been down as much as 17% in early trading. The retailer issued a warning yesterday that its quarterly profit will probably be less than half of what The Street was expecting. The company blames the trouble on a weak labor market that has left many teens jobless, and without money to spend. It also cites an environment of deep discounts. Prior to the drop we're seeing at this hour, shares were basically flat in 2013, down less than 1%.
Another big presence at the mall, Fossil (FOSL), is up 12% following a rock solid earnings report. The company posted profits of $1.15 a share when estimates were for 93-cents, which was the figure a year ago. Revenue also exceeded expectations. Shares dropped 6% yesterday on a downgrade to underweight from equal weight. Barclays analyst Matthew McClintock said sales for the chain are slowing, and lowered his price target $15 to $100 a share. Wonder where he is now? As of yesterday's close, Fossil shares were up 14% year-to-date.
Disney (DIS) reports quarterly earnings after the closing bell. The world's largest entertainment company is expected to post profits of $1.01 a share, the same as last year, but on revenue that's risen to $11.64-billion. Watch for mention of The Lone Ranger movie which was a bona fide flop for the company. Also key will be ratings and ad rates for the family of ESPN networks. Disney stock his an all-time high of almost $68 back in May, a month before The Lone Ranger's release. It's currently up 29% year-to-date.
Zillow (Z) reports after the closing bell. Shares rose 4% yesterday on word that tomorrow President Obama will take part in an event hosted by the company, answering questions from ordinary people about housing. By the way Yahoo has been picked to stream that event live. The stock in fact hit an all-time high yesterday, and is now up 218% year-to-date. Never mind that the company is expected to post a quarterly loss of 11-cents a share, following profits of 8-cents a share a year ago. Revenue is estimated to be up more than 60%.