American Eagle Grounded By Poor Forecast
Date
11/21/2023 3:15:14 PM
(MENAFN- Baystreet)
American Eagle Grounded by Poor Forecast
Shares of American Eagle (NYSE:AEO) plummeted in Tuesday trading after the company issued a holiday forecast that failed to impress.
For its holiday quarter, American Eagle expects sales to be up high-single digits, ahead of the 3.4% sales growth analysts had expected, according to LSEG. However, it's expecting its operating income to be between $105 million and $115 million, which is mostly below expectations of $114 million.
The forecast was dampened by an expected 20% uptick in selling and general administrative expenses, the company said.
The company's reported net income for the three-month period that ended October 28 was $96.7 million, or 49 cents per share, compared with $81.3 million, or 42 cents per share, a year earlier.
Sales rose to $1.3 billion, up about 5% from $1.24 billion a year earlier.
During the quarter, American Eagle's gross margin came in at 41.8%, below the 42.1% that analysts had expected, according to StreetAccount.
American Eagle managed to eke out a 5% uptick in sales despite an overall slowdown in the apparel industry but its performance still failed to impress Wall Street.
For the full year, American Eagle is projecting revenue to be up mid-single digits, compared to previous guidance of up low single digits. Analysts had expected full-year sales growth to be around 2.6%, according to LSEG.
AEO shares shed $3.62, or 18.3%, to $16.13.
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