Latest news with #JaySchottenstein
Yahoo
6 days ago
- Business
- Yahoo
American Eagle (NYSE:AEO) Posts Q1 Sales In Line With Estimates But Stock Drops
Young adult apparel retailer American Eagle Outfitters (NYSE:AEO) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 4.7% year on year to $1.09 billion. On the other hand, next quarter's revenue guidance of $1.23 billion was less impressive, coming in 0.8% below analysts' estimates. Its non-GAAP loss of $0.29 per share was 32.6% below analysts' consensus estimates. Is now the time to buy American Eagle? Find out in our full research report. Revenue: $1.09 billion vs analyst estimates of $1.09 billion (4.7% year-on-year decline, in line) Adjusted EPS: -$0.29 vs analyst expectations of -$0.22 (32.6% miss) Revenue Guidance for Q2 CY2025 is $1.23 billion at the midpoint, below analyst estimates of $1.24 billion Operating Margin: -7.8%, down from 6.8% in the same quarter last year Locations: 1,176 at quarter end, up from 1,173 in the same quarter last year Same-Store Sales fell 3% year on year (7% in the same quarter last year) Market Capitalization: $1.91 billion 'As we noted in our preliminary release, the first quarter was a challenging period for our business. While we are disappointed with the results, we are taking actions to better position the company and drive stronger performance in the upcoming quarters. Our brands remain resilient. The team is executing with urgency as we look to strengthen both the topline and profit flow-through,' commented Jay Schottenstein, AEO's Executive Chairman of the Board and Chief Executive Officer. With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults. A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $5.27 billion in revenue over the past 12 months, American Eagle is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. As you can see below, American Eagle's sales grew at a sluggish 4.3% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as its store footprint remained unchanged. This quarter, American Eagle reported a rather uninspiring 4.7% year-on-year revenue decline to $1.09 billion of revenue, in line with Wall Street's estimates. Company management is currently guiding for a 5% year-on-year decline in sales next quarter. Looking further ahead, sell-side analysts expect revenue to decline by 1.1% over the next 12 months, a deceleration versus the last six years. This projection doesn't excite us and suggests its products will face some demand challenges. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. A retailer's store count influences how much it can sell and how quickly revenue can grow. American Eagle listed 1,176 locations in the latest quarter and has kept its store count flat over the last two years while other consumer retail businesses have opted for growth. When a retailer keeps its store footprint steady, it usually means demand is stable and it's focusing on operational efficiency to increase profitability. The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year. American Eagle's demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 3.4% per year. Given its flat store base over the same period, this performance stems from not only increased foot traffic at existing locations but also higher e-commerce sales as demand shifts from in-store to online. In the latest quarter, American Eagle's same-store sales fell by 3% year on year. This decline was a reversal from its historical levels. We struggled to find many positives in these results. Its EPS missed and its gross margin fell slightly short of Wall Street's estimates. Overall, this was a softer quarter, and most retailers seem to be feeling some pain from the macro and from tariffs. The stock traded down 7.4% to $10.35 immediately after reporting. American Eagle may have had a tough quarter, but does that actually create an opportunity to invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
6 days ago
- Business
- Business Wire
AEO Inc. Reports First Quarter Fiscal 2025 Results
PITTSBURGH--(BUSINESS WIRE)--American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the first quarter ended May 3, 2025. 'As we noted in our preliminary release, the first quarter was a challenging period for our business. While we are disappointed with the results, we are taking actions to better position the company and drive stronger performance in the upcoming quarters. Our brands remain resilient. The team is executing with urgency as we look to strengthen both the topline and profit flow-through,' commented Jay Schottenstein, AEO's Executive Chairman of the Board and Chief Executive Officer. First Quarter 2025 Results: Total net revenue of $1.1 billion decreased 5%. Total comparable sales declined 3%. Aerie comparable sales decreased 4%. American Eagle comparable sales declined 2%. Gross profit was $322 million and the gross margin of 29.6% compared to 40.6% last year. Merchandise margins decreased 960 basis points, driven primarily by inventory writedowns and higher in-season markdowns, as well as increased product costs. Buying, Occupancy and Warehousing (BOW) expenses as a percentage of sales deleveraged 140 basis points. Selling, general and administrative expense of $339 million increased 2% and deleveraged 190 basis points as a percentage of sales. Lower compensation and incentives costs were offset by increased advertising. The operating loss was $(85) million. The adjusted operating loss of $(68) million excluded $17 million in impairment and restructuring charges primarily related to the company's supply chain network optimization project, as previously disclosed. Diluted loss per share was $(0.36). Adjusted diluted loss per share was $(0.29). Average diluted shares outstanding were 180 million. Inventory Total ending inventory decreased 5% to $645 million with units down 5%. Following the writedown, inventory for the season is better aligned to sales trends. Shareholder Returns On March 17, 2025, the company announced a $200 million accelerated share repurchase agreement (ASR). At the closing price on March 14, 2025, this equated to approximately 18.1 million shares, representing approximately 9.5% of the company's fully diluted outstanding stock. The company is on track to complete the ASR in the second quarter. In addition to the ASR, the company also completed $31 million in open-market share repurchases and paid $22 million via its quarterly cash dividend of $0.125 per share. Capital Expenditures Capital expenditures totaled $62 million in the first quarter. The company expects 2025 capital expenditures to be approximately $275 million, compared to previous guidance of approximately $300 million. Outlook The company's fiscal year 2025 outlook remains withdrawn in light of macro uncertainty and as management reviews forward plans in the context of first quarter results. The second quarter outlook is as follows: Webcast and Supplemental Financial Information Management will host a conference call today at 4:30pm Eastern Time. To access the live webcast and audio replay, please click here. Additionally, a financial results presentation is posted in the Investor Relations section on AEO's website, About American Eagle Outfitters, Inc. American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer with a portfolio of beloved apparel brands including American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder and Unsubscribed. Rooted in optimism, inclusivity and authenticity, AEO's brands empower every customer to celebrate their unique personal style by offering casual, comfortable, timeless outfitting and high-quality products that are made to last. AEO Inc. operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its brands. For more information, visit Non-GAAP Measures This press release includes operating income and earnings per share presented on an adjusted or non-GAAP basis, which are non-GAAP financial measures. These financial measures are not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (GAAP) and are not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. We believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance when reviewed in conjunction with our GAAP Consolidated Financial Statements and provides a higher degree of transparency. These amounts are not determined in accordance with GAAP and, therefore, should not be used exclusively in evaluating our business and operations. The table included in this release reconciles the GAAP financial measures to the non-GAAP financial measures discussed above for the 13 weeks ended May 3, 2025. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This release and related statements by management contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent management's expectations or beliefs concerning future events, including, without limitation, the results for the second quarter of fiscal 2025. Words such as 'outlook,' "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," 'may,' 'potential,' and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements made by the company are inherently uncertain because they are based on assumptions and expectations concerning future events and are subject to change based on many important factors, some of which may be beyond the company's control. Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise and even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. The following factors, in addition to the risks disclosed in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 and in any other filings that we may make with the Securities and Exchange Commission, in some cases have affected, and in the future could affect, the company's financial performance and could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements included in this release or otherwise made by management: the risk that the company's operating, financial and capital plans may not be achieved; our inability to anticipate fluctuations in customer demand and respond to changing consumer preferences and fashion trends and to manage our inventory commensurately; the seasonality of our business; our inability to achieve planned store financial performance; our inability to react to raw material cost, labor and energy cost increases; our inability to gain market share in the face of declining shopping center traffic or attract customers to our stores; our inability to respond to changes in e-commerce and leverage omni-channel capabilities; our inability to execute on our key business priorities; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; the impact import tariffs and other trade restrictions imposed by the U.S., China or other countries have had, and may continue to have, on our product costs, as well as the possibility that product costs may be affected by other foreign trade issues, such as, currency exchange rate fluctuations, increasing prices for raw materials, supply chain issues, political instability or other reasons; challenges with information technology systems, including safeguarding against security breaches; changes to U.S. or other countries' trade policies and tariff and import/export regulations, including, without limitation, uncertainty with respect to the U.S./China trade agreement; and global economic, public health, social, political and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, which could have a material adverse effect on our business, results of operations and liquidity. The use of the 'company,' 'AEO,' 'we,' "us," and 'our' in this release refers to American Eagle Outfitters, Inc. AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and shares in thousands, except per share amounts) (unaudited) 13 Weeks Ended May 3, 2025 May 4, 2024 (In thousands) (Percentage of revenue) (In thousands) (Percentage of revenue) Total net revenue $ 1,089,599 100.0 % $ 1,143,867 100.0 % Cost of sales, including certain buying, occupancy and warehouse expenses 767,178 70.4 679,628 59.4 Gross profit 322,421 29.6 464,239 40.6 Selling, general and administrative expenses 338,786 31.1 333,493 29.2 Impairment and restructuring charges 17,119 1.6 - 0.0 Depreciation and amortization expense 51,697 4.7 52,910 4.6 Operating (loss) income (85,181 ) (7.8 ) 77,836 6.8 Interest (income), net (219 ) (0.0 ) (3,439 ) (0.3 ) Other (income), net (351 ) (0.0 ) (1,396 ) (0.1 ) (Loss) income before income taxes $ (84,611 ) (7.8 ) $ 82,671 7.2 (Benefit) provision for income taxes (19,712 ) (1.8 ) 14,919 1.3 Net (loss) income $ (64,899 ) (6.0 )% $ 67,752 5.9 % Basic net (loss) income per common share $ (0.36 ) $ 0.34 Diluted net (loss) income per common share $ (0.36 ) $ 0.34 Weighted average common shares outstanding - basic 179,548 196,429 Weighted average common shares outstanding - diluted 179,548 201,310 Expand AMERICAN EAGLE OUTFITTERS, INC. NET REVENUE BY SEGMENT (unaudited) 13 Weeks Ended (In thousands) May 3, 2025 May 4, 2024 Net Revenue: American Eagle $ 693,865 $ 724,744 Aerie 359,788 372,652 Other 43,970 54,984 Intersegment Elimination (8,024 ) (8,513 ) Total Net Revenue $ 1,089,599 $ 1,143,867 Expand AMERICAN EAGLE OUTFITTERS, INC. STORE INFORMATION (unaudited) 13 Weeks Ended May 3, 2025 Consolidated stores at beginning of period 1,172 Consolidated stores opened during the period AE Brand (1) 1 Aerie (incl. OFFL/NE) (2) 3 Todd Snyder 1 Unsubscribed 1 Consolidated stores closed during the period AE Brand (1) (2 ) Aerie (incl. OFFL/NE) (2) - Unsubscribed - Total consolidated stores at end of period 1,176 Stores by Brand AE Brand (1) 828 Aerie (incl. OFFL/NE) (2) 321 Todd Snyder 20 Unsubscribed 7 Total consolidated stores at end of period 1,176 Total gross square footage at end of period (in '000) 7,232 International license locations at end of period (3) 363 (1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by-side locations, and AE/Aerie/OFFL/NE side-by-side locations. (2) Aerie (incl. OFFL/NE) includes Aerie stand alone locations, OFFL/NE stand alone locations, and Aerie/OFFL/NE side-by-side locations. (3) International licensed retail stores are not included in the consolidated store data or the total gross square footage calculation. Expand AMERICAN EAGLE OUTFITTERS, INC. GAAP to Non-GAAP Reconciliation (Dollars in thousands, except per share amounts) (unaudited) 13 Weeks Ended May 3, 2025 Operating Loss Benefit for Income Taxes Net Loss Earnings per Diluted Share GAAP Basis $ (85,181 ) $ (19,712 ) $ (64,899 ) $ (0.36 ) % of Revenue (7.8 )% (6.0 )% Add: Impairment and restructuring charges (1) 17,119 13,131 0.07 Tax effect of the above (2) $ 3,988 Non-GAAP Basis $ (68,062 ) $ (15,724 ) $ (51,768 ) $ (0.29 ) % of Revenue (6.2 )% (4.8 )% The following footnotes relate to impairment and restructuring charges recorded in the 13 weeks ended May 3, 2025: (1) The Company recorded $15.3 million of asset impairment charges primarily related to closing two fulfillment centers as part of its supply chain network optimization project. Of this amount, $10.4 million of charges relate to ROU assets and $4.9 million relates to property and equipment. The Company also recorded $1.8 million of employee severance, primarily related to closing two fulfillment centers. (2) The tax effect of excluded items is the difference between the tax provision calculated on a GAAP basis and an adjusted non-GAAP basis. Expand
Yahoo
17-05-2025
- Business
- Yahoo
American Eagle Outfitters pulls 2025 outlook on ‘disappointing' Q1
In its preliminary report for the first quarter, American Eagle Outfitters said its performance was 'disappointing', which has led to a reconsideration of its strategy for the upcoming months. AEO expects revenue for full year to decline by low-single-digit decline, with anticipated operating income ranging between $360m and $375m. AEO chief executive officer and board executive chairman Jay Schottenstein said: "We are clearly disappointed with our execution in the first quarter. Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory. As a result, we have taken an inventory write down on spring and summer goods." Initial financial data for Q1 suggests a projected revenue of approximately $1.1bn, representing a 5% decline from the previous year's corresponding period. Comparable sales also fell by an estimated 3%, with American Eagle brand sales down by 2% and Aerie by 4%. AEO anticipates reporting a GAAP operating loss around $85m for the quarter, with an adjusted operating loss of about $68m. The adjusted loss reflects heightened promotional activity and includes an inventory charge nearing $75m due to discounts on seasonal merchandise. In its fiscal 2024 report released this March, revenue for the first quarter was expected to decline mid-single-digit decline and operating income was projected to be between $20m and $25m. The GAAP operating loss encompasses an additional charge of nearly $17m for asset impairment and restructuring costs, primarily linked to shutting down two distribution centres as part of AEO's supply chain optimisation efforts. Schottenstein added: "We have entered the second quarter in a better position, with inventory more aligned to sales trends. Additionally, we are actively evaluating our forward plans. Our teams continue to work with urgency to strengthen product performance, while improving our buying principles." "American Eagle Outfitters pulls 2025 outlook on 'disappointing' Q1" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Why American Eagle Stock Plummeted After Earnings
American Eagle Outfitters warned last night of weak sales and an inventory write-down. Management says it will hit its sales number for Q1, but it pulled guidance for the rest of this year. AEO stock trades at attractive multiples to historical earnings. 10 stocks we like better than American Eagle Outfitters › American Eagle Outfitters (NYSE: AEO) stock slid 6.4% through 10:50 a.m. ET Wednesday after preannouncing sales broadly in line with expectations, but warning of worse times to come. Analysts are expecting AEO to report just under $1.1 billion in Q1 sales, and the company said last night it expects to hit that number -- this time. Unfortunately, macroeconomic uncertainty prevented management from committing to hit its full-year numbers, and the company pulled its guidance for the rest of 2025. Assuming AEO hits its Q1 number, $1.1 billion in revenue would represent about a 5% year-over-year decline in sales at the retail clothier. Management broke the numbers down even further, anticipating a 3% decline in same-store sales, a 2% decline at the American Eagle brand, and Aerie down 4%. Operating losses for the quarter could be as high as $85 million. CEO Jay Schottenstein told investors he is "disappointed with our execution in the first quarter," which was marred by "higher promotions" to clean out "excess inventory," resulting in charges to earnings for inventory write-downs. The good news is that recent developments in President Trump's tariffs policy could lessen AEO's troubles going forward. And Schottenstein said the company continues to "work with urgency" to repair its inventory problems. The better news is that the stock is heading into these troubled waters in a decent position. Valued at less than 7x trailing earnings and less than 9x free cash flow, and paying a 3.9% dividend yield, AEO stock isn't particularly expensive. If it can get through this current crisis and resume growing, it might turn out to be a good buy long term. Before you buy stock in American Eagle Outfitters, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and American Eagle Outfitters wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $613,951!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $796,353!* Now, it's worth noting Stock Advisor's total average return is 948% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends American Eagle Outfitters. The Motley Fool has a disclosure policy. Why American Eagle Stock Plummeted After Earnings was originally published by The Motley Fool Sign in to access your portfolio
Miami Herald
15-05-2025
- Business
- Miami Herald
Mall retail chain sounds alarm on concerning customer behavior
It's a pretty difficult time to be a retailer. No matter who you are - or what you sell - most retailers these days would tell you that doing business has been tough over the last few years. Related: Popular outdoor retailer closing all stores, no bankruptcy Declining foot traffic at many brick-and-mortar stores, a rise in theft, higher prices, and now, tariffs, are making things confusing and complicated. And it's even harder to be a retailer based out of the mall. Being located within a mall puts extra strain on a retailer's business model. It used to be considered getting a golden ticket; running a business in a mall was a surefire way to get lots of foot traffic, which often converted into high sales. But as the popularity of the American mall declines, foot traffic goes down with it. Many malls are still charging their tenants outsized rents for dwindling access to customers, though. This leaves retailers with a conundrum; they either pull up stakes and break their leases to find business elsewhere, or go down with the ship. Both are pricey - and particularly unsavory - propositions. Image source:Some traditional mall retailers are large enough to invest in a total rebrand. For example, Macy's has been embarking on what it calls its Bold New Chapter, where it's featuring new labels, closing down underperforming stores, and ramping up online operations. But this process is lengthy and expensive. Not every retailer has the luxury of time or resources to reinvent itself. More Retail: Home Depot makes drastic budget-friendly move to take on Lowe'sStruggling cosmetics brand sounds alarm, laying off thousandsPopular Trader Joe's wine brand has bad news, making harsh choiceStruggling retail chain sounds the alarm on growing problem American Eagle Outfitters (AEO) is located mostly inside indoor shopping malls; it has a large physical footprint with about 830 stores across the U.S. The retailer was once hugely popular with teens, particularly Millennials who spent a vast period of time in malls during their younger years. Now, however, those teens have grown up, and demand simply isn't what it used to be. American Eagle, which targets young teens and women in particular, now has stiff competition from cheaper online stores like Shein and Temu. But it's got a much more expensive brick-and-mortar operation to upkeep, and not as much brand power to keep its prices elevated. So the mall outfitter is withdrawing its 2025 financial outlook amid what it's calling "macro uncertainty." Related: After bankruptcy, mall anchor begins going-out-of-business sales Revenue decreased 5%, or about $1 billion in the first quarter. Part of this is due to a misguided approach to sales and inventory. "We are clearly disappointed with our execution in the first quarter," CEO Jay Schottenstein said. "Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory." American Eagle will take a $75 million write down on its spring and summer clothing as it works to offload overstock inventory. Analysts are anticipating American Eagle sees an operating loss of $68 million. The company reports Q1 earnings on May 29, 2025. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
