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American Eagle (AEO) Q4 Earnings: Will the Stock Disappoint?
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American Eagle Outfitters, Inc. (AEO - Free Report) is scheduled to release fourth-quarter fiscal 2016 results on Mar 1. The big question facing investors is, whether this apparel – shoe retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, American Eagle’s earnings were in line with the Zacks Consensus Estimate, while it outperformed the same by an average of 8.6% in the trailing four quarters. Further, American Eagle’s third quarter earnings marked the company’s ninth straight quarter of improved profits. A look at American Eagle’s earnings estimates revisions shows that the Zacks Consensus Estimate for both, the fourth-quarter and fiscal 2016 has been stable, over the last 30 days. However, the current Zacks Consensus Estimate of 38 cents per share for the fiscal fourth quarter reflects a year-over-year decline of 9.1%. Also, analysts polled by Zacks expect revenues of $1.1 billion, down marginally from the year-ago quarter.
Further, American Eagle forms part of the Retail – Wholesale sector. Per the latest Earnings Preview, while total earnings for the sector are expected to dip 1.2%, revenues are projected to improve 4.7%.
American Eagle Outfitters, Inc. Price, Consensus and EPS Surprise
American Eagle recently posted comparable store sales (comps) metrics for the holiday season 2016. Comps remained flat year over year, bearing the brunt of a tough holiday period which was marked by intense promotional activities and a choppy environment. This also led management to reiterate its previously issued dull outlook for fourth-quarter fiscal 2016. The company projected earnings in a band of 37–39 cents per share, compared with 42 cents earned in the year-ago period.
Apart from this, the company’s attempt to grow globally exposes it to currency woes and other global risks. Also, stiff competition from other industry players remains a threat. All these factors, which make us apprehensive about the company’s upcoming performance, have also been weighing upon investors’ sentiment.
Evidently, American Eagle has underperformed the Zacks categorized Retail – Wholesale sector in the past six months. The company’s shares have slumped 17.5% over the past six months, compared with the sector’s growth of 3.7%.
Earnings Whispers
Our proven model does not conclusively show that American Eagle is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for American Eagle is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Eagle currently carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
NIKE, Inc. (NKE - Free Report) , expected to release earnings on Mar 28, currently has an Earnings ESP of +3.85% and a Zacks Rank #3.
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American Eagle (AEO) Q4 Earnings: Will the Stock Disappoint?
American Eagle Outfitters, Inc. (AEO - Free Report) is scheduled to release fourth-quarter fiscal 2016 results on Mar 1. The big question facing investors is, whether this apparel – shoe retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, American Eagle’s earnings were in line with the Zacks Consensus Estimate, while it outperformed the same by an average of 8.6% in the trailing four quarters. Further, American Eagle’s third quarter earnings marked the company’s ninth straight quarter of improved profits. A look at American Eagle’s earnings estimates revisions shows that the Zacks Consensus Estimate for both, the fourth-quarter and fiscal 2016 has been stable, over the last 30 days. However, the current Zacks Consensus Estimate of 38 cents per share for the fiscal fourth quarter reflects a year-over-year decline of 9.1%. Also, analysts polled by Zacks expect revenues of $1.1 billion, down marginally from the year-ago quarter.
Further, American Eagle forms part of the Retail – Wholesale sector. Per the latest Earnings Preview, while total earnings for the sector are expected to dip 1.2%, revenues are projected to improve 4.7%.
American Eagle Outfitters, Inc. Price, Consensus and EPS Surprise
American Eagle Outfitters, Inc. Price, Consensus and EPS Surprise | American Eagle Outfitters, Inc. Quote
Factors Influencing this Quarter
American Eagle recently posted comparable store sales (comps) metrics for the holiday season 2016. Comps remained flat year over year, bearing the brunt of a tough holiday period which was marked by intense promotional activities and a choppy environment. This also led management to reiterate its previously issued dull outlook for fourth-quarter fiscal 2016. The company projected earnings in a band of 37–39 cents per share, compared with 42 cents earned in the year-ago period.
Apart from this, the company’s attempt to grow globally exposes it to currency woes and other global risks. Also, stiff competition from other industry players remains a threat. All these factors, which make us apprehensive about the company’s upcoming performance, have also been weighing upon investors’ sentiment.
Evidently, American Eagle has underperformed the Zacks categorized Retail – Wholesale sector in the past six months. The company’s shares have slumped 17.5% over the past six months, compared with the sector’s growth of 3.7%.
Earnings Whispers
Our proven model does not conclusively show that American Eagle is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for American Eagle is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Eagle currently carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Staples, Inc. , expected to release earnings on Mar 3, currently has an Earnings ESP of +4.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
NIKE, Inc. (NKE - Free Report) , expected to release earnings on Mar 28, currently has an Earnings ESP of +3.85% and a Zacks Rank #3.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>