Shares of American Eagle Outfitters (AEO 27.94%) had been climbing up the charts at present because the teen-focused attire retailer posted better-than-expected ends in its second-quarter earnings report, fueled by current advertising and marketing campaigns with Sydney Sweeney and Travis Kelce.
After a weak first half, its steerage additionally referred to as for the enterprise to return to progress within the second half of the yr.
As of 9:50 a.m. ET, the inventory was up 28.4% on the information.
Picture supply: Getty Photographs.
American Eagle takes flight
General comparable gross sales within the quarter had been down 1% with 3% progress in Aerie and a 3% decline in American Eagle.
Income fell 1% to $1.28 billion, topping estimates at $1.24 billion. Gross margin inched up from 38.6% to 38.9%, and earnings per share rose 15%, benefiting from aggressive share buybacks, to $0.45, nicely forward of the consensus at $0.20, as shares excellent fell by 13%.
CEO Jay Schottenstein stated, “We had been happy to see an enchancment within the enterprise throughout the second quarter pushed by larger demand, decrease promotions, and well-managed bills, all of which exceeded our expectations.”
What’s subsequent for American Eagle
Whereas the second-quarter outcomes clearly happy the market, the true shock gave the impression to be the corporate’s outlook.
Administration guided for comparable gross sales to extend in low single digits for each the third and fourth quarters as Schottenstein stated: “The autumn season is off to a constructive begin. Fueled by stronger product choices and the success of current advertising and marketing campaigns with Sydney Sweeney and Travis Kelce, we have now seen an uptick in buyer consciousness, engagement, and comparable gross sales.”
If these campaigns proceed their momentum, the corporate may prime its steerage within the second half of the yr.
Teen attire retail shares have been notoriously risky, however issues appear to be clicking for American Eagle proper now, and its share buybacks look poised to repay.
Jeremy Bowman has no place in any of the shares talked about. The Motley Idiot recommends American Eagle Outfitters. The Motley Idiot has a disclosure coverage.
