22 May American Eagle Outfitters reports weak first quarter
American Eagle Outfitters said this morning that it has identified 150 stores to close in North America over the next three years and has lease expirations coming up on 300 more, giving the South Side teen clothing retailer options as it watches to see where its customers go next.
“We have half the fleet that comes due the next few years,” interim CEO Jay Schottenstein told analysts on a conference call to discuss first quarter earnings this morning. “That puts us in the driver’s seat.”
The retailer, which operates more than 1,000 stores in the U.S., Canada, Mexico, China and Hong Kong, reported a profit of $3.87 million, or 2 cents per share, compared to $28 million, or 14 cents per share, during the same period a year earlier.
In the three months ended May 3, the teen retailer reported net income of $3.87 million, or 2 cents per share, compared to $28 million, or 14 cents per share, during the same period a year earlier.
Total revenue fell 5 percent to $646 million during the quarter. Sales at stores open at least a year fell 10 percent.
“Results were consistent with our expectations,” said Mr. Schottenstein in the official announcement. He cited weak sales and increased markdowns as an issue in the quarter, and noted the macro environment has been weak.
He said the company is working to improve profitability. In addition to rationalizing the store fleet, he said other actions toward that goal included improving omni-channel capabilities, reducing expenses and expanding internationally.
In the second quarter, American Eagle is projecting earnings per share to be about breakeven, excluding potential asset impairment and restructuring charges.
At mid-day, the company’s shares were down about 5 percent, trading at $10.74.