NEW YORK — Healthy full-priced selling propelled American Eagle Outfitters Inc.’s strong fourth-quarter and year-end profits, and boosted sales to double-digit percentage gains.
The company, however, remained tight-lipped about its new concept, saying only that it will hit the market with three to five test stores during fall 2006, later than its initial target of spring 2006. In addition, the company said it is exploring international expansion.
For the three months ended Jan. 29, income increased to $101.2 million, or $1.32 a diluted share, from $35.4 million, or 49 cents, in the same year-ago quarter. The company posted earnings from continuing operations of $107.2 million, or $1.40 a diluted share, beating analysts’ consensus estimate of $1.39. That compared with a profit of $43.2 million, or 60 cents, in the 2003 quarter. Earnings from continuing operations exclude charges related to the disposition of the company’s 109-store Bluenotes chain, which it sold to Canadian retailer Michael Gold in December for an undisclosed sum.
Sales for the quarter rose 37.4 percent to $674 million from $490.6 million, while same-store sales jumped 28.6 percent. American Eagle noted that it is reviewing its accounting practices for leasing and anticipates restating previous annual and quarterly financial statements, though the earnings impact is expected to be immaterial.
Shares of American Eagle hit a new 52-week high on Wednesday, closing at $58.87, or up 6.5 percent, in trading on the New York Stock Exchange.
As for its new concept, James O’Donnell, chief executive officer, said: “For competitive reasons, we don’t expect to provide additional details about the new business until we’re ready to launch.”
The business is expected to cater to the post-college crowd, in comparison with the American Eagle concept that is geared toward teens and young adults. O’Donnell said American Eagle has assembled a separate team to lead its new concept because “we do not want distractions or crossover between the two.”
Former Polo Ralph Lauren and Gap executive Ken Pilot last month was named president of the new concept, Chuck Chupein was appointed senior vice president and chief operating officer and James Olsen was tapped as vice president and general merchandise manager of men’s. In January, American Eagle said two former Abercrombie executives, Michele Donnan Martin and Charles Martin, will lead product design and development.
Related Articles
You May Also Like
Separately, the company said February same-store sales rose 32.4 percent, leading it to raise first-quarter earnings estimates to 52 to 54 cents — ahead of analysts’ estimates of 47 cents — from a projection of 43 to 45 cents. Full-year 2005 earnings are seen increasing in the double digits, Laura Weil, chief financial officer, said. Analysts’ consensus is for $3.30 in 2005.
For the year, American Eagle said income was $214 million, or $2.85 cents, from $60 million, or 83 cents, in 2003. Earnings from continuing operations were $224.9 million, or $2.99, compared with $83.5 million, or $1.16, in 2003. Annual sales in 2004 soared 31.1 percent to $1.88 billion from $1.44 billion, while same-store sales were up 21.4 percent.