American Eagle Outfitters Stock Slides After Q3 Earnings Miss: Retail Sentiment Dampens

The apparel company's net revenue declined by 1%, attributed to the roughly $45 million of adverse impact it had due to a retail calendar shift.

American Eagle Outfitters ($AEO) stock was down more than 13% on Thursday after the clothing company posted earnings below consensus Wall Street estimates, dampening retail sentiment.

Earnings per share came in at $0.41, below the $0.47 analysts were expecting. Revenue stood at $1.29 billion, also below the estimated revenues of $1.3 billion, according to Stocktwits data. 

The apparel company's net revenue declined by 1%, attributed to the roughly $45 million of adverse impact it had due to a retail calendar shift. 

Comparable sales increased 3% in the third quarter. Fourth-quarter comparable sales are expected to be up by 1%, the company said, adding that revenues are expected to decline 4%. 

The decline will reflect the $85 million impact from the combination of the retail calendar shift and one less selling week, the company has said.

Retail sentiment on the stock swung to 'extremely bearish' (8/100) from 'extremely bullish' (94/100) a day ago. Message volumes continued to be 'extremely high.' 



The company also recorded an $18 million impairment and restructuring charge in the third quarter. The company has reportedly taken additional steps to streamline its corporate cost structure, changing its Hong Kong retail operations from company-owned to a licensed model.

"Led by a strong back-to-school season, we achieved comparable sales growth across brands and channels and delivered adjusted operating income at the high end of our guidance range,” Jay Schottenstein, AEO’s executive chairman and CEO, said in a statement. 

“We have entered the holiday season well positioned, with our leading brands offering high-quality merchandise, great gifts, and an outstanding shopping experience across channels. Key selling periods have seen a positive customer response, yet we remain cognizant of potential choppiness during non-peak periods," he added.

American Eagle Outfitters' apparel brands include  American Eagle, Aerie, OFFL/NE by Aerie, and Todd Snyder. 

American Eagle stock is down 4% year-to-date.

For updates and corrections email newsroom[at]stocktwits[dot]com.<