What to Look for in American Eagle Earnings

American Eagle Outfitters Inc. (NYSE: AEO) is set to release its fiscal first-quarter earnings report after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for $0.18 in earnings per share (EPS) on $731.38 million in revenue. In the same period of last year, the retailer posted EPS of $0.15 and $699.52 million in revenue.

This top retail stock acted much better in March and April since bouncing off lows posted in early February, but now the company is back approaching these lows again. American Eagle is a leading global specialty retailer offering high-quality, on-trend clothing, accessories and personal care products at affordable prices under its American Eagle Outfitters and Aerie brands.

Analysts have highlighted that the company offers among the clothing sector’s best denim execution and on-trend fashion, and those positives could drive traffic upside, as well as be long-term drivers of international, Aerie, digital and omni inventory. Good execution, solid inventory control and the trend for old-school denim fashions are all positives.

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A few analysts weighed in on American Eagle before earnings were released:

• B. Riley reiterated a Buy rating with a $20 price target.
• Goldman Sachs reiterated a Sell rating.
• Wunderlich has a Hold rating with a $13 price target.
• BMO Capital Markets has a Market Perform rating with a $14 price target.
• Deutsche Bank initiated coverage with a Hold rating and a $17 price target.

So far in 2016, American Eagle has underperformed the broad markets, with the stock down nearly 10%. Over the past 52 weeks, the stock is down more than 10%.

Shares of American Eagle were trading down 2.5% at $13.52 on Wednesday, with a consensus analyst price target of $17.42 and a 52-week trading range of $12.78 to $18.49.