We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is American Eagle (AEO) Likely to Disappoint in Q1 Earnings?
Read MoreHide Full Article
American Eagle Outfitters, Inc. (AEO - Free Report) is scheduled to release first-quarter fiscal 2017 results on May 17. The big question facing investors is whether this apparel retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, American Eagle posted a positive earnings surprise of 2.6%. Notably, the company has delivered positive earnings surprises in eight out of the past nine quarters, with an average trailing four-quarter surprise of 8.6%. Further, earnings in fourth-quarter fiscal 2016 jumped year over year, which marked the 10th straight quarter of improvement in the company’s profits.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle’s shares have underperformed the Zacks categorized Retail – Apparel/Shoe industry in the last three months. The stock slumped 6%, while the industry dipped 2.3%.
The slump in share price can be attributed to American Eagle’s soft outlook for first-quarter fiscal 2017, in line with the trends witnessed early in the quarter. The company expects comps to dip in a flat to low single-digit range. Also, merchandise margins are anticipated to remain weak, due to intense promotional activities. Consequently, the company issued a dismal bottom-line outlook for the fiscal first quarter.
A look at American Eagle’s earnings estimates revisions shows that the Zacks Consensus Estimate for first-quarter fiscal 2017 has been stable in the last 30 days. However, the current Zacks Consensus Estimate of 17 cents per share for the fiscal first quarter reflects a year-over-year decline of 24.6%. Further, analysts polled by Zacks expect revenues of $744 million, down marginally from the year-ago quarter.
Apart from this, the company’s attempt to expand globally exposes it to currency woes and other global risks. Moreover, 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.
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, 2 or 3 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 17 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 that Warrant a Look
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:
Home Depot Inc (HD - Free Report) , slated to release earnings on May 16, currently has an Earnings ESP of +1.24% and a Zacks Rank #2 (Buy).
Best Buy Co. Inc. (BBY - Free Report) , scheduled to release earnings on May 25, currently has an Earnings ESP of +12.50% and a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Is American Eagle (AEO) Likely to Disappoint in Q1 Earnings?
American Eagle Outfitters, Inc. (AEO - Free Report) is scheduled to release first-quarter fiscal 2017 results on May 17. The big question facing investors is whether this apparel retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, American Eagle posted a positive earnings surprise of 2.6%. Notably, the company has delivered positive earnings surprises in eight out of the past nine quarters, with an average trailing four-quarter surprise of 8.6%. Further, earnings in fourth-quarter fiscal 2016 jumped year over year, which marked the 10th straight quarter of improvement in the company’s profits.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle Outfitters, Inc. Price and EPS Surprise | American Eagle Outfitters, Inc. Quote
Factors Influencing this Quarter
American Eagle’s shares have underperformed the Zacks categorized Retail – Apparel/Shoe industry in the last three months. The stock slumped 6%, while the industry dipped 2.3%.
The slump in share price can be attributed to American Eagle’s soft outlook for first-quarter fiscal 2017, in line with the trends witnessed early in the quarter. The company expects comps to dip in a flat to low single-digit range. Also, merchandise margins are anticipated to remain weak, due to intense promotional activities. Consequently, the company issued a dismal bottom-line outlook for the fiscal first quarter.
A look at American Eagle’s earnings estimates revisions shows that the Zacks Consensus Estimate for first-quarter fiscal 2017 has been stable in the last 30 days. However, the current Zacks Consensus Estimate of 17 cents per share for the fiscal first quarter reflects a year-over-year decline of 24.6%. Further, analysts polled by Zacks expect revenues of $744 million, down marginally from the year-ago quarter.
Apart from this, the company’s attempt to expand globally exposes it to currency woes and other global risks. Moreover, 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.
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, 2 or 3 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 17 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 that Warrant a Look
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:
Home Depot Inc (HD - Free Report) , slated to release earnings on May 16, currently has an Earnings ESP of +1.24% and a Zacks Rank #2 (Buy).
Wal-Mart Stores Inc. (WMT - Free Report) , scheduled to release earnings on May 18, currently has an Earnings ESP of +1.04% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Best Buy Co. Inc. (BBY - Free Report) , scheduled to release earnings on May 25, currently has an Earnings ESP of +12.50% and a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>