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Factors Influencing American Eagle's (AEO) Q4 Earnings
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American Eagle Outfitters, Inc. (AEO - Free Report) is expected to register declines in the top and bottom lines when it reports fourth-quarter fiscal 2022 results on Mar 1. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $1.5 billion, which indicates a decline of 2.5% from the year-ago reported figure.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at 30 cents per share, suggesting a 14.3% decline from the year-ago quarter's reported number. The Zacks Consensus Estimate for the to-be-reported quarter's earnings has moved up by a penny in the past 30 days.
We expect fiscal fourth-quarter total revenues to decrease 4.6% year over year to $1.4 billion and the bottom line to decline 30% to 25 cents per share.
The company reported an earnings surprise of 82.6% in the last reported quarter. However, it has a negative earnings surprise of 5% for the trailing four quarters, on average.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle has been gaining from continued strength in the Aerie brand, driven by strength across intimates, leggings, apparel, and beauty and accessories, as well as OFFLINE activewear. Also, a solid online show bodes well. Our estimate for the Aerie brand revenues indicates an increase of 0.4% year over year for the fiscal fourth quarter.
AEO has been on track with the Real Power, Real Growth value-creation plan. Its fourth-quarter fiscal 2022 performance is expected to have benefited from the significant progress on its Real Power Real Growth value creation plan. The plan has been driving profitability through real estate and inventory-optimization efforts, omni-channel and customer focus, and investments to improve the supply chain. The company’s efforts under the plan have been aiding the recovery of the American Eagle brand.
Moreover, the company announced non-critical expense reductions such as store payroll, corporate expenses, professional services and advertising. As a result, the company expects SG&A expenses to be flat year over year for the second half of fiscal 2022. This indicates slight SG&A leverage in the to-be-reported quarter.
In a recent development, management revealed preliminary fourth-quarter fiscal 2022, which seems encouraging. Its American Eagle brand showed signs of improvement and Aerie has been in sync with expectations. The top line was anticipated to reflect gains from Quiet Logistics to the tune of 2 percentage points.
The company’s gross margins were envisioned to be at the higher end of the earlier mentioned 32-33%, driven by lesser promotions and strong inventory management. Its quarter-end inventories are likely to have been down year over year, in line with the prior view. Management also noted that it recorded the second-highest holiday sales period in its history.
However, American Eagle’s fiscal fourth-quarter results are likely to reflect the tough macro environment and continued impacts of elevated freight expenses. Also, rising inflation and higher gas prices are anticipated to have acted as deterrents.
Moreover, the company’s fiscal fourth-quarter performance is likely to have been affected by tough year-over-year comparisons. Our estimate indicates a 6.5% decline in brand revenues for the fiscal fourth quarter, with a 9.3% decline for the American Eagle brand.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for American Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Eagle has a Zacks Rank #2 and an Earnings ESP of -15.97%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +14.04% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.67 suggests a decrease of 2.3% from the year-ago quarter’s reported figure.
Casey's top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $3.5 billion, indicating an increase of 15.5% from the figure reported in the year-ago quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.90% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to $2.72 per share. The consensus estimate suggests 7.5% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.6 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +7.97% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fourth-quarter fiscal 2022 results. The consensus mark for DKS’ quarterly revenues is pegged at $3.4 billion, which suggests a rise of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DICK'S Sporting’s earnings has moved down by a penny to $2.86 per share in the past 30 days. The consensus estimate indicates a 21.4% decline from the year-ago quarter’s reported figure.
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Factors Influencing American Eagle's (AEO) Q4 Earnings
American Eagle Outfitters, Inc. (AEO - Free Report) is expected to register declines in the top and bottom lines when it reports fourth-quarter fiscal 2022 results on Mar 1. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $1.5 billion, which indicates a decline of 2.5% from the year-ago reported figure.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at 30 cents per share, suggesting a 14.3% decline from the year-ago quarter's reported number. The Zacks Consensus Estimate for the to-be-reported quarter's earnings has moved up by a penny in the past 30 days.
We expect fiscal fourth-quarter total revenues to decrease 4.6% year over year to $1.4 billion and the bottom line to decline 30% to 25 cents per share.
The company reported an earnings surprise of 82.6% in the last reported quarter. However, it has a negative earnings surprise of 5% for the trailing four quarters, on average.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle Outfitters, Inc. price-eps-surprise | American Eagle Outfitters, Inc. Quote
Key Factors to Note
American Eagle has been gaining from continued strength in the Aerie brand, driven by strength across intimates, leggings, apparel, and beauty and accessories, as well as OFFLINE activewear. Also, a solid online show bodes well. Our estimate for the Aerie brand revenues indicates an increase of 0.4% year over year for the fiscal fourth quarter.
AEO has been on track with the Real Power, Real Growth value-creation plan. Its fourth-quarter fiscal 2022 performance is expected to have benefited from the significant progress on its Real Power Real Growth value creation plan. The plan has been driving profitability through real estate and inventory-optimization efforts, omni-channel and customer focus, and investments to improve the supply chain. The company’s efforts under the plan have been aiding the recovery of the American Eagle brand.
Moreover, the company announced non-critical expense reductions such as store payroll, corporate expenses, professional services and advertising. As a result, the company expects SG&A expenses to be flat year over year for the second half of fiscal 2022. This indicates slight SG&A leverage in the to-be-reported quarter.
In a recent development, management revealed preliminary fourth-quarter fiscal 2022, which seems encouraging. Its American Eagle brand showed signs of improvement and Aerie has been in sync with expectations. The top line was anticipated to reflect gains from Quiet Logistics to the tune of 2 percentage points.
The company’s gross margins were envisioned to be at the higher end of the earlier mentioned 32-33%, driven by lesser promotions and strong inventory management. Its quarter-end inventories are likely to have been down year over year, in line with the prior view. Management also noted that it recorded the second-highest holiday sales period in its history.
However, American Eagle’s fiscal fourth-quarter results are likely to reflect the tough macro environment and continued impacts of elevated freight expenses. Also, rising inflation and higher gas prices are anticipated to have acted as deterrents.
Moreover, the company’s fiscal fourth-quarter performance is likely to have been affected by tough year-over-year comparisons. Our estimate indicates a 6.5% decline in brand revenues for the fiscal fourth quarter, with a 9.3% decline for the American Eagle brand.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for American Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Eagle has a Zacks Rank #2 and an Earnings ESP of -15.97%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +14.04% and a Zacks Rank #3. The company is expected to register a bottom-line decline when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.67 suggests a decrease of 2.3% from the year-ago quarter’s reported figure.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Casey's top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $3.5 billion, indicating an increase of 15.5% from the figure reported in the year-ago quarter.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.90% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has moved up by a penny in the past seven days to $2.72 per share. The consensus estimate suggests 7.5% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.6 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
DICK'S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +7.97% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fourth-quarter fiscal 2022 results. The consensus mark for DKS’ quarterly revenues is pegged at $3.4 billion, which suggests a rise of 1.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for DICK'S Sporting’s earnings has moved down by a penny to $2.86 per share in the past 30 days. The consensus estimate indicates a 21.4% decline from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.