What to Expect When American Eagle Reports After the Close

American Eagle Outfitters Inc. (NYSE: AEO) is scheduled to release its fiscal third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are calling for $0.48 in earnings per share (EPS) and $1.02 billion in revenue. In the same period of last year, it reportedly had $0.37 in EPS and $960.43 million in revenue.

In its most recent quarter, consolidated comparable sales increased 9%, compared to a 2% increase last year. By brand, American Eagle’s comparable sales increased 7% and Aerie’s comparable sales increased 27%, compared to flat and 26% comparable sales last year, respectively.

Although the results for the fiscal second quarter were solid, investors seemed to look past this to the third-quarter guidance, which disappointed. The company said it expects to see EPS in the range of $0.45 to $0.47.

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CEO Jay Schottenstein commented at that time:

The second quarter results exceeded our expectations, delivering record sales and 79% growth in adjusted earnings. This marked our 14th consecutive quarter of comparable sales growth, with the American Eagle and Aerie brands posting positive results across both stores and e-commerce. Driven by exceptional product, teamwork and execution, it’s gratifying to see strength throughout our business, as we capitalize on the broad appeal of our brands and leading merchandise assortments.

Excluding Tuesday’s move, American Eagle had outperformed the broad markets, with its stock up about 17% in the past 52 weeks. In just 2018 alone, the stock was up only 4%.

A few analysts weighed in ahead of the report:

• Deutsche Bank has a Hold rating.
• Merrill Lynch has an Underperform rating and an $18 target.
• Citigroup has a Buy rating with a $27 price target.
• Wedbush has an Outperform rating and a $29 price target.

Shares of American Eagle were last seen down 2% at $19.09, with a consensus analyst price target of $25.80. The stock has a 52-week trading range of $16.14 to $29.88.

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