American Eagle Outfitters cleared Q4 forecasts and announced a three-year strategy to improve profitability. But shares reversed lower after opening at a two-year high.
American Eagle reported a nearly 65% increase in adjusted earnings to 61 cents per share. Revenue jumped 12% to $1.68 billion. FactSet analysts expected earnings of 50 cents per share on $1.66 billion in sales.
Earnings growth slowed over the last two quarters while revenue gains accelerated.
Digital revenue increased 19% while store sales rose 10%. American Eagle comparable sales grew 6%. Its Aerie brand business saw 16% revenue growth on 13% comparable sales growth.
American Eagle guided Q1 operating income to range from $65 million to $70 million with revenue up in the mid-single digits. The company sees fiscal 2024 operating income ranging from $445 million to $465 million on 2% to 4% revenue growth.
FactSet analysts predict 2024 earnings increase 4.6% to $1.59 per share adjusted on 2.7% revenue growth to $5.4 billion.
American Eagle also unveiled a profitability growth plan that it says will deliver 3% to 5% revenue growth, expand operating income in the mid-to-high teens and achieve a 10% operating margin over the next three years.
American Eagle Stock
AEO stock slid 1.9% Thursday after leaping 6.8% in early trade to hit its highest level since January 2022. Shares spiked 13% during premarket trade.
American Eagle through Wednesday was up 44% from a Nov. 21 low. The stock rallied 31% from an October breakout, rebounding from 10-week support in December and February.
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