UPDATE: American Eagle Posts Drop In Q1 Earnings, Plans To Close 150 Stores

American Eagle Outfitters

reported an 86% drop in its fiscal first-quarter earnings and announced its plans to close an additional 150 stores in North America. The company also issued a weak fiscal second-quarter forecast. American Eagle's quarterly profit declined to $3.9 million, or $0.02 per share, versus a year-ago profit of $28 million, or $0.14 per share. Its revenue slipped 4.9% to $646.1 million. However, analysts were estimating earnings of $0.00 per share on revenue of $648 million. Consolidated comparable sales fell 10%. Its gross margin narrowed to 35% from 38.8%, while comparable-store sales declined 10%. American Eagle expects Q2 EPS of $0.00, versus analysts' estimates of $0.04. Jay Schottenstein, Interim CEO stated, “Results were consistent with our expectations. The quarter reflected weak sales and increased markdowns. We are committed to improved profitability and are working hard to implement our plan to strengthen our brands, channels and operations. Specific actions underway include continuing to build strong omni-channel capabilities, rationalizing our store fleet, reducing expenses, growing international licensed stores, and most importantly, delivering great merchandise and customer experience across our brands. Our focus is on leveraging our strong brands and talented team in order to deliver long-term profitable growth and enhanced value for our shareholders.” American Eagle shares fell 4.59% to $10.81 in pre-market trading.