American Eagle Outfitters Inc. (AEO - Free Report) reported disappointing net sales and comparable store sales (comps) results for the nine weeks ending Jan 4, 2014.
This Pittsburgh, Pennsylvania based company delivered total sales of $882 million, down 2% from $904 million recorded last year. Comps also slipped 7% compared to a 5% year-over-year rise.
Though the company saw an impressive Thanksgiving weekend, sales and traffic remained soft during Christmas owing to stiff competition from other retailers with better promotional offers. However, the company regained momentum following Christmas. Further, it envisions inventories to be at the desired level at the end of the current fiscal year.
Given the trend so far, this Zacks Rank #5 (Strong Sell) stock now expects its fourth-quarter fiscal 2013 earnings to dovetail with the lower-end of previously provided guidance range of 26 cents to 30 cents a share. The current Zacks Consensus Estimate for the fourth quarter is pegged at 29 cents a share, and we could witness a downtrend in the estimate in the coming days.
This retailer of apparel and accessories is scheduled to announce its fourth-quarter fiscal 2013 results on Mar 11.
American Eagle, which operates over 1,000 stores globally, is not the only company to have cut its forecast due to lower-than-expected sales and margin pressure following intense price competition that resulted in huge discounts.
Retailers that lowered guidance battered by the holiday results include Family Dollar Stores Inc. , Pacific Sunwear of California Inc. and L Brands Inc. (LB - Free Report) .
Family Dollar, the self-service retail discount store chain, now projects fiscal 2014 earnings between $3.25 and $3.55 per share, down from $3.80 to $4.15 forecasted earlier. L Brands, the specialty retailer of women’s intimate and other apparel, now anticipates fourth-quarter fiscal 2013 earnings to be approximately $1.60 per share compared to its earlier forecast of $1.67 to $1.82.
Apparel retailer, Pacific Sunwear now expects its fourth-quarter fiscal 2013 loss to lie between 18-21 cents per share, lower than its previous guidance of 12-17 cents per share.
Consumer spending environment was not very convincing and bargain hunters went from one shop to another to grab the best deal.