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Analyst Blog

American Eagle Outfitters Inc. (AEO - Free Report) is scheduled to report third-quarter fiscal 2016 results on Nov 30. Last quarter, this specialty retailer of casual apparel, accessories and footwear posted a positive earnings surprise of 9.5%.

Notably, the company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 9.3%. Let's see how things are shaping up prior to this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that American Eagle Outfitters 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. American Eagle Outfitters has an Earnings ESP of -2.44%, as the Most Accurate estimate stands at 40 cents, while the Zacks Consensus Estimate is pegged higher at 41 cents. The company carries a Zacks Rank #3, which when combined with an ESP of -2.44%, makes an earnings surprise difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors Influencing the Upcoming Results

American Eagle has been gaining from its constant efforts to enhance brands via innovations, through technological advancements as well as its commitment toward enriching consumer experience. We believe that the company’s focus on enhancing consumer experience by providing top-quality products is likely to position its brands well in the evolving retail space.

However, high dependence on external suppliers and macroeconomic headwinds is likely to dampen results. Further, the company’s attempt to grow globally exposes it to currency woes and other global risks.

Earlier, the company had offered its view for third-quarter fiscal 2016, wherein it anticipates comps growth at a low single-digit rate. Further, the company projects earnings per share in the band of 40–41 cents compared with 35 cents earned in the prior-year quarter.

AMER EAGLE OUTF Price, Consensus and EPS Surprise

 

AMER EAGLE OUTF Price, Consensus and EPS Surprise | AMER EAGLE OUTF Quote

Other 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:

Sanderson Farms, Inc. (SAFM - Free Report) has an Earnings ESP of +4.48% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ascena Retail Group Inc. (ASNA - Free Report) carries a Zacks Rank #3 and has an Earnings ESP of +14.29%.

Express Inc. (EXPR - Free Report) has an Earnings ESP of + 16.67% and also carries a Zacks Rank #3.

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