American Eagle Outfitters turned in a third straight quarter of profit, but spooked investors with a downbeat profit forecast.
Shares of American Eagle Inc. tumbled Wednesday after the teen fashion retailer turned in fourth-quarter results that were roughly in line with expectations — but offered a downbeat forecast for the current quarter.
For the quarter ended Feb. 2, the company reported net income of $94.8 million, or 47 cents per diluted share, compared to the year ago quarter’s net income of $51.3 million, or 26 cents per share. Revenues rose 8.6 percent to $1.12 billion from $1.03 billion.
The latest quarter was skewed by a number of special items; excluding unusual items, officials said, per-share earnings were 55 cents – one penny short of the 56 cents analysts surveyed by Yahoo Finance had been expecting.
That earnings miss was a relatively small matter. But Wall Street was more concerned with a profit warning company officials provided: American Eagle said it now expects per-share earnings in the current first quarter to be in the range of 16 to 19 cents –- well below the 25 cents analysts have been expecting.
Disappointed investors responded with a selloff that sent American Eagle shares down $2.30, or 10.1 percent, to close Wednesday at $20.27.
American Eagle reported lower-than-expected earnings Wednesday, leading stocks to dive.
CEO Robert Hanson blamed mall traffic, which he said was “not robust.”
Over the past year, American Eagle shares have strongly outperformed those of specialty-retail rival Abercrombie & Fitch, and some experts remain convinced Eagle can recover its momentum.
Growth is still in the cards for the Pittsburgh company, according to PiperJaffray analyst Stephanie Wissink. “We continue to be encouraged by longer-term prospects to… yield greater profitability on steady sales,” she said. Among other things, the analyst said, American Eagle’s international markets “present viable growth opportunities.”
Tanya Basu 