The stock price American Eagle Outfitters (NYSE:AEO) surged after the company reported better than expected earnings for the second-quarter. The shares of the company were trading $12.55 per share, up by more than 8% at the time of this writing around 12:08 in the afternoon in New York.
American Eagle Outfitters’ financial results
American Eagle Outfitters (NYSE:AEO) reported earnings of $0.03 per share, down from $0.10 per share in the same period a year ago. Its total net revenue dropped 2% to $711 million from $727 million last year.
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Wall Street analysts expected American Eagle Outfitters (NYSE:AEO) to deliver zero EPS on $690 million in revenue.
“Although the second quarter results were slightly ahead of our expectations, they do not reflect our potential. We did, however make significant progress on our priorities to build a sustainable path to higher profitability,” said Jay Schottenstein, the interim CEO of American Eagle Outfitters (NYSE:AEO).
Schottenstein added that the company entered the second-half of the year with a good inventory position as it cleared spring and summer merchandise. He is confident that the merchandise of American Eagle Outfitters (NYSE:AEO) will ramp up through the holiday season.
During the quarter, American Eagle Outfitters (NYSE:AEO) reported that its merchandise inventories declined 15% to $393 million.
“We remain vigilant on expense management, while pursuing strategic initiatives crucial to our future success. We are confident that these efforts will position AEO to achieve stronger operating results and deliver increasing shareholder value,” stated Schottenstein.
During the quarter, American Eagle Outfitters (NYSE:AEO) opened 20 new stores including five new mainline stores in under-penetrated markets in North America, ten factory stores, three stores in Mexico and two stores in China.
American Eagle Outfitters added seven international licensed stores. According to the company, it has 84 licensed stores in 12 countries by the end of the period.
The company closed five stores including five aerie stores during the quarter. American Eagle Outfitters (NYSE:AEO) plans to close 50 American Eagle and 25 aerie stores in North America this year.
Third-quarter EPS outlook
American Eagle Outfitters (NYSE:AEO) expected to deliver earnings in the range of $0.17 to $0.19 per share for the third quarter.