American Eagle Outfitters stock fell 13% after hours due to revenue and gross margin miss

From Nasdaq: 2024-12-06 21:35:03

American Eagle Outfitters (NYSE: AEO) stock fell 13% after hours on December 4th, following a revenue and gross margin miss in Q3. The company forecasted a slowdown in sales for the holiday quarter, with Q4 sales expected to decline by 4%. AEO’s current price of $20 aligns with Trefis’ valuation estimate based on expected EPS and P/E multiple for fiscal year 2024.

In Q3, AEO’s revenue fell 1% y-o-y to $1.3 billion, with diluted earnings per share at 41 cents per share. Aerie brand revenue rose 4% y-o-y to $410 million, while American Eagle core brand revenue fell 3% y-o-y to $832 million. The company’s digital revenue increased 6%, and store revenue decreased 4% in Q3.

The retailer’s gross margin fell to 40.9% in Q3, impacted by the shifted retail calendar and increased markdowns. The Aerie brand showed growth, while the American Eagle brand struggled with tough comparisons to post-pandemic recovery. AEO’s social media activities, e-commerce growth, lack of debt, and focus on Aerie provide flexibility for future growth.

AEO’s stock performance has been volatile over the past 3 years, with returns of 29% in 2021, -43% in 2022, and 55% in 2023. The Trefis High Quality Portfolio has outperformed the S&P 500 each year during the same period. With uncertainty in the macroeconomic environment, AEO’s performance relative to the index remains uncertain.



Read more at Nasdaq: What’s Happening With American Eagle Outfitters’ Stock?