Pulled from Benzinga Pro data, American Eagle Outfitters (NYSE:AEO) posted Q1 earnings of $31.74 million, an increase from Q4 of 37.06%. Sales dropped to $1.05 billion, a 30.04% decrease between quarters. In Q4, American Eagle Outfitters earned $50.43 million, and total sales reached $1.51 billion.
What Is ROIC?
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, American Eagle Outfitters posted an ROIC of 2.34%.
Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.
Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, American Eagle Outfitters posted an ROIC of 2.34%.
Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.
For American Eagle Outfitters, the positive return on invested capital ratio of 2.34% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.
Analyst Predictions
American Eagle Outfitters reported Q1 earnings per share at $0.16/share, which did not meet analyst predictions of $0.25/share.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
