American Eagle Beats Q1 Views, Shares Surge

Shares of

jumped around 8 percent in pre-market trading after the company reported better-than-expected results for the first quarter. For the current quarter, American Eagle expects earnings of $0.11 to $0.14 per share, versus analysts' estimates of $0.11 per share. The Pittsburgh, Pennsylvania-based company reported a quarterly profit of $29.1 million, or $0.15 per share, versus a year-ago profit of $3.9 million, or $0.02 per share. Its revenue rose 8.3 percent to $699.5 million. However, analysts were expecting a profit of $0.12 per share on revenue of $692.32 million. The average estimate among 11 Estimize users was for earnings of $0.12 per share and revenue of $688.56 million. Its comparable sales climbed 7 percent in the quarter, versus a 10 percent drop in the year-ago quarter. Its gross margin widened to 37.5 percent from 34.9 percent. Operating income climbed to $42 million, versus $8 million last year. At the end of the first quarter, total merchandise inventories rose 1 percent to $333 million, versus $329 million last year. American Eagle ended the first quarter with $327 million in total cash and investments, versus $328 million last year. Jay Schottenstein, Interim CEO said, "Our strong first quarter results reflected outstanding merchandise and customer-focused execution. Both AE and aerie performed well, achieving higher sales and earnings, proving successful in a price promotional retail climate. We will continue to raise the bar by offering great product quality, innovation, style and value. Across the organization, we are focused on the market opportunity to leverage our competitive strengths in merchandising, new technologies and capabilities to gain further market share and deliver earnings growth. American Eagle shares gained 7.94 percent to $16.99 in pre-market trading.