American Eagle Raises EPS Estimate
American Eagle Outfitters (NYSE: AEO) saw its share price jump by 9.57 percent on Wednesday, after raising its third quarter EPS outlook to 19 cents a share.
The Q3 EPS beats Thompson Reuters' estimate of a 15 cents a share third quarter EPS. It was definitely better than the Q2 EPS, which came in at 10 cents a share. That sunny estimate was revealed in a press release issued Wednesday.
American Eagle management attributed the increase in EPS to savings from closing a distribution center. One thing is clear, however; the increased EPS didn't come from better sales. American Eagle's own press release noted direct sales in the 13 weeks ending Nov. 3 were down 5 percent when compared the same period last year.
American Eagle is beating the target price that analysts at JPM Morgan Chase put on it, on Oct. 30. The Chase analysts priced America Eagle at $14 to $16 a share. At the close of business on Wednesday, American Eagle shares were trading at $16.71 -- the highest price since August, when American Eagle was trading at $16.84 a share.
Shares of the clothing store chain have risen by 15.1 percent since hitting a low of $13.24 on Oct. 8. Despite the rise in share prices, American Eagle is still struggling. Its net revenues fell by 6 percent during the third quarter.
All that being said, American Eagle Outfitters is doing better than competitors Abercrombie & Fitch (NYSE: ANF) or Aeropostale (NYSE: ARO). Abercrombie and Fitch's share value was down 5.31 percent in trading Wednesday, and Aeropostale's shares fell by 7.07 percent.
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