Services Sector Stock Finished in Green: American Eagle Outfitters, Inc. (NYSE: AEO)

American Eagle Outfitters, Inc.’s (NYSE: AEO), a part of Services sector and belongs to Apparel Stores industry; ended its day with 0.77% and finalized at the price of $26.22. During its last trading session, Stock traded with the total exchanged volume of 1903517 shares. The average volume stands around 4330.18 shares. The average numbers of shares are traded in a security per day, during the recent 3-month period. The stock has the relative volume of 0.43. Relative volume is a ratio between current volume and 3-month average value, intraday adjusted.

American Eagle Outfitters, Inc. (NYSE: AEO) stated EPS of $0.22 for the quarter ended May 5, 2018, contrast to $0.14 for the quarter ended April 29, 2017. Not Including restructuring charges of $0.01, the company’s adjusted EPS increased 44% to $0.23, contrast to adjusted EPS of $0.16 last year.

First Quarter 2018 Results

Total net revenue increased 8% to $823M contrast to $762M last year.

Consolidated comparable sales increased 9% over the comparable period ending May 6, 2017.

By brand, American Eagle’s comparable sales increased 4% and Aerie’s comparable sales increased 38%.

Gross profit increased 10% to $304M from $278M. The gross margin rate increased 50 basis points to 37.0% of revenue contrast to 36.5% last year, reflecting rent leverage and a favorable markdown rate, partially offset by increased digital delivery expense.

Selling, general and administrative expense of $210M leveraged 10 basis points to 25.5% as a rate to revenue Because of strong comparable sales. Higher store compensation and incentive expense drove the majority of the increase from $195M last year.

Depreciation expense increased 4% to $42M from $40M last year, leveraging 20 basis points to 5.1% as a rate to revenue.

Operating income of $51M, which includes $1.6M of restructuring charges, contrast to $37M last year. Adjusted operating income increased 23% to $52M from $42M last year, leveraging 80 basis points to 6.4% as a rate to revenue.

EPS of $0.22 increased 57% contrast to EPS of $0.14 last year. Adjusted EPS of $0.23 increased 44% contrast to adjusted EPS of $0.16 last year.

Restructuring Charges

 

In the first quarter, the company incurred restructuring charges primarily related to corporate severance, totaling $1.6M, or about $0.01 per share.

Inventory

Total ending inventories at cost increased 11% to $404M, in line with the company’s expectations. The increase reflected the company’s clearance store strategy and the support of strong sales trends in American Eagle and Aerie. Looking forward, we expect second quarter ending inventory to be up in the high-single digits.

 

Capital Expenditures

In the first quarter, capital expenditures totaled $47M, with over half related to store remodeling projects and new openings, and the balance to support the digital business, omni-channel tools and general corporate maintenance.

American Eagle Outfitters, Inc.’s (AEO) EPS growth ratio for the past five years was -4.10% while Sales growth for the past five years was 1.80%. Return on equity (ROE) was noted as 18.50% while return on investment (ROI) was 16.00%. The stock’s institutional ownership stands at 89.00%.

 

Andrew Carr

Andrew Carr covers the Business news across the all us market sectors for Streetobserver.com. He has over 5 years experience writing financial and business news. He is a graduate of the University of Florida graduating with an MBA. He focuses on adding value to investors' portfolios via thoroughly checked proprietary information and data sources. He has a very strong interest in stock trading, and other various investments. He currently lives in Fort Myers, FL with his wife Heidi.

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