American Eagle stocks down, back-to-school delay hurts sales growth

Shares of American Eagle Outfitters fell more than 13% on Wednesday after the slow start of the back-to-school season and poor weather conditions led to store sales growth comparable to analysts' expectations.

The company said sales had been disappointing in the last two weeks of July, a typical back-to-school period. However, he indicated that he had finished the season strongly and that the month of August had been the strongest of the quarter. The company also surpassed Wall Street's estimates in terms of earnings and income.

American Eagle also said that although China currently accounts for 30% of the company's output, it does not expect that recently applied tariffs on Chinese products will have a significant impact this year. He estimates that this figure can be reduced to 20% over the next 12 to 18 months. His team has been able to negotiate with manufacturing partners in China and transfer production to other countries.

Here is what the company reported about what Wall Street was waiting for, according to a poll of analysts made by Refinitiv:

• Adjusted result: 39 cents against 32 cents expected
• Turnover: $ 1.04 billion, up from $ 1.01 billion
• Same-store sales up 2%, up from expected 3.1% increase

"We had several successes and achievements in the second quarter, but we were disappointed to publish operating results below expectations," said CEO Jay Schottenstein. "We have faced challenges due in large part to the underperformance of some seasonal categories and a delayed start to school, although we have experienced positive growth in our consolidated sales for the first time. the 18th consecutive quarter. "

The company announced a net profit of $ 64.98 million, or 38 cents a share, up 7.7% from a profit of $ 60.33 billion, or 34 cents a share, there is a year. Excluding restructuring charges, the company reported earnings per share of 39 cents, exceeding analyst estimates of 7 cents.

For the quarter ended Aug. 3, American Eagle reported revenue of $ 1.04 billion compared to $ 964.9 billion a year ago.

By brand, the company's Aerie division was stronger, with same-store sales growth of 16% and a 19th consecutive quarter of double-digit growth. In American Eagle stores open for at least 12 months, Sames lost 1%.

The brand said Aerie's braces had "regained all of its excitement" after peaking a few years ago and its new rounded jean size resulted in additional growth due to some customers' favorite haircut and silhouette. .

The company's shares have fallen 26% since January, bringing it to a market value of $ 2.4 billion.