American Eagle Outfitters, Inc. (AEO) Q3 2024 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 05 2024
0mins
Should l Buy AEO?
Source: SeekingAlpha
Consolidated Revenue $1.3 billion, down 1% year-over-year due to a $45 million headwind related to the retail calendar.
Comparable Sales Increased 3%, following a 5% increase last year.
Operating Income $106 million, which included $18 million of impairment and restructuring costs. Adjusted operating income was $124 million, on the high end of guidance, with approximately $20 million headwind related to the shifted calendar.
Adjusted Operating Margin 9.6%, flat to last year.
Gross Profit Dollars $527 million, decreased 3% with a gross margin rate of 40.9%, compared to 41.8% last year.
SG&A Expenses Decreased 3% quarter-over-quarter, leveraging 50 basis points as a rate of sales.
Depreciation Down year-over-year, leveraging 40 basis points.
Tax Rate 26.1%, in line with guidance.
Adjusted Earnings Per Share $0.48 per share.
Ending Inventory Cost Up 5% year-over-year, positioned well for the holiday season.
Capital Expenditures (CapEx) Totaled $60 million for the quarter, bringing year-to-date investments to $158 million.
Shareholder Returns Approximately $24 million returned through cash dividends, bringing year-to-date returns through dividends and share repurchases to over $200 million.
Cash Position $160 million in cash and no debt.
Total Liquidity Over $800 million including the revolver.
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Analyst Views on AEO
Wall Street analysts forecast AEO stock price to rise
11 Analyst Rating
1 Buy
8 Hold
2 Sell
Hold
Current: 19.420
Low
20.00
Averages
24.80
High
35.00
Current: 19.420
Low
20.00
Averages
24.80
High
35.00
About AEO
American Eagle Outfitters, Inc. is a global specialty retailer. The Company offers clothing, accessories and personal care products under its American Eagle and Aerie brands. The Company operates through two segments: American Eagle and Aerie. American Eagle is an American jeans and apparel brand. Aerie is a lifestyle brand offering intimates, apparel, activewear, and swim collections. OFFLINE by Aerie offers a complete collection of activewear and accessories. The Company sells its products directly to consumers through its retail channel, which includes its stores and concession-based shops-within-shops. It operates stores in the United States, Canada, Mexico, and Hong Kong. The Company has license agreements with third parties to operate American Eagle and Aerie stores and online marketplace businesses throughout Asia, including India, Europe, Latin America, and the Middle East. The Company also operates Todd Snyder New York (Todd Snyder), a premium menswear brand.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Ad Launch: The new campaign, titled 'Syd for Short', showcases Sydney Sweeney's casual style in American Eagle jean shorts, aiming to redefine this iconic staple and further solidify the brand's image among younger consumers.
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- Significant Market Potential: Bernstein estimates that GLP-1 users could purchase between 150 million and 700 million apparel items due to weight loss, translating to an additional $13 billion in annual spending in the U.S. apparel sector, highlighting robust market demand.
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- Reduced Profit Distribution: Between fiscal 2013 and fiscal 2024, dividends generated by Nexcom fell from $51.9 million to $29.8 million, a 43% decline, meaning significantly less funding for morale and welfare programs that support sailors, potentially impacting their morale and family support.
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