Back to top

Image: Bigstock

American Eagle (AEO) Stock Up on Impressive Holiday Sales

Read MoreHide Full Article

Shares of American Eagle Outfitters, Inc. AEO gained 3.2% yesterday, following the company’s announcement of record holiday sales. The impressive numbers can be attributed to strong momentum in American Eagle’s (AE) brand’s signature jeans range and the Aerie brand.

Management stated that fourth-quarter fiscal 2019, comparable sales (comps) till date were nearly flat compared with 6% increase in the year-ago quarter.

Moreover, the company reiterated the previously issued fiscal fourth-quarter earnings guidance. It continues to anticipate earnings per share of 34-36 cents, which indicates a decline from 43 cents recorded in the year-ago quarter. Also, the Zacks Consensus Estimate for the current quarter is pegged at 37 cents per share, which is higher than the company’s guidance. Markedly, the aforementioned earnings guidance does not include the impacts of tax reform as well as potential asset impairment and restructuring charges.

The stock has lost 14.6% in the past six months compared with the industry’s decline of 7.9%.


Apart from American Eagles, other retailers like L Brands LB, Zumiez ZUMZ and Urban Outfitters (URBN - Free Report) have posted holiday season sales. While L Brands posted 3% comps decline for the nine weeks ended Jan 4, 2020, Zumiez’s comps increased 6.8% during the same time frame. Moreover, Urban Outfitters’ comparable retail sales rose 3% for the two months (ended Dec 31, 2019).

Coming back to American Eagle, it boasts an impressive comps trend. The company delivered 19th straight quarter of positive comps in third-quarter fiscal 2019. Solid gains from strategic initiatives as well as ability to boost market share through strong brands and merchandise have been fueling comps. Digital and in-store businesses also contributed to comps growth.

Meanwhile, the AE brand is gaining from its leadership position in bottoms, with jeans business recording 25th consecutive quarter of comps growth in the fiscal third quarter. The quarter also marked Aerie’s 20th straight double-digit comps growth, indicating significant momentum in all areas of the business.

Additionally, the company has been striving to develop its omni-channel platform by enhancing the digital portals apart from investing in store fleet. Consistent strength in the Aerie business enabled American Eagle to gain a strong footing in the retail space. The Aerie brand has evolved into a lifestyle brand and is engaged in expanding market share as well as rapidly growing customer base. Moreover, management is focused on maximizing shareholders’ value.

The Zacks Rank #3 (Hold) company is scheduled to announce fourth-quarter and fiscal 2019 results on March 4, 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Urban Outfitters, Inc. (URBN) - free report >>