American Eagle Shares: It’s shares fell 15% in premarket trade Tuesday after the business provided a Christmas outlook that disappointed.
- IMPORTANT NOTES
- American Eagle’s stock dropped in premarket trading.
- The retailer outperformed expectations on both the top and bottom lines, but provided a holiday forecast that fell short of expectations.
- Retailers are afraid that demand would be sluggish throughout the holiday season and have released a series of cautious projections.
According to LSEG, American Eagle expects Christmas quarter sales to be up in the mid single digits, exceeding the 3.4% sales rise projected by analysts. However, it expects its operating income to be between $105 million and $115 million, which is significantly lower than the $114 million expected by StreetAccount.
The company’s outlook was affected by an expected 20% increase in sales and general administration expenses. However, the apparel store outperformed in its fiscal third quarter. Here’s how the company fared in comparison to what Wall Street expected, according to an LSEG, now known as Refinitiv, survey of analysts:
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- Earnings per share: 49 cents, compared to the projected 48 cents
- Revenue: $1.3 billion, compared to $1.28 billion predicted
The company’s reported net income for the three months ended October 28 was $96.7 million, or 49 cents per share, up from $81.3 million, or 42 cents per share, a year ago. Sales increased to $1.3 billion, up nearly 5% from $1.24 billion the previous year. According to Street Account, American Eagle’s gross margin was 41.8% for the quarter, which was lower than the 42.1% projected by analysts.
Amid a 5% increase in sales and an overall slowdown in the apparel market, American Eagle’s performance failed to please Wall Street.A similar situation unfolded at competitor Abercrombie & Fitch, which also disclosed results and a projection that fell flat versus surging sales growth on Tuesday. American Eagle expects revenue to be up in the mid-single digits for the full year, compared to the previous forecast of up in the low single digits. According to LSEG, analysts predicted full-year sales growth of roughly 2.6%.
According to StreetAccount, the company revised its full-year operating income prediction and now expects it to be in the $340 million to $350 million range, up from the previous guidance of $325 million to $350 million. For the whole year, SG&A spending is estimated to be in the low double digits.
shops have been on pins and needles ahead of the important holiday shopping season, fearing that demand will be sluggish. American Eagle and Abercrombie & Fitch’s muted comments echo similar statements from other shops that just announced earnings. Both Best Buy and Lowe’s lowered their predictions on Tuesday, blaming an unpredictable consumer and a sustained slowdown in big-ticket purchases.
Frequently asked questions
Why did American Eagle stock drop?
Shares of American Eagle Outfitters fell after the firm reduced its outlook. The company reported earnings and revenue that were in line with forecasts for the quarter. American Eagle announced poor earnings after rival Abercrombie & Fitch reported a surprise profit.
What is the stock price forecast for American Eagle?
Based on 8 Wall Street analysts’ 12-month price targets for American Eagle in the previous three months The average price target is $18.31, with a top of $22.00 and a low of $12.50 expected. The average price target is -0.44% lower than the current price of $18.39.
Is the American Eagle shares a good investment?
American Silver Eagles are excellent investments since they have intrinsic worth and will not depreciate like other currencies. The mintage of silver eagles is restricted. This means that American Silver Eagles manufactured under certain conditions are certain to be rare.
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