American Eagle Outfitters, Inc. (AEO) has reported a 33.15 percent plunge in profit for the quarter ended Jan. 28, 2017. The company has earned $54.62 million, or $0.30 a share in the quarter, compared with $81.71 million, or $0.42 a share for the same period last year.
Revenue during the quarter went down marginally by 0.78 percent to $1,097.25 million from $1,105.83 million in the previous year period. Gross margin for the quarter expanded 32 basis points over the previous year period to 35.41 percent. Total expenses were 92.17 percent of quarterly revenues, up from 89.54 percent for the same period last year. That has resulted in a contraction of 263 basis points in operating margin to 7.83 percent.
Operating income for the quarter was $85.87 million, compared with $115.64 million in the previous year period.
Jay Schottenstein, chief executive officer commented, "I'm extremely proud that our strategic priorities centered on product innovation and customer focus have delivered results and greater consistency throughout 2016, despite a highly competitive and challenging retail landscape. The American Eagle brand continued its strong leadership in jeans and bottoms and has experienced accelerated growth in women's apparel. Aerie posted double-digit sales growth throughout 2016, fueled by superior merchandise, a strengthening customer base and growing brand awareness. We've made great progress, yet we have much more opportunity across the marketplace. I'm confident that the strength of our brands and focused priorities will enable us to deliver long-term returns to our shareholders."
For the first-quarter, American Eagle Outfitters, Inc. forecasts diluted earnings per share to be in the range of $0.15 to $0.17.
Working capital increases sharply
American Eagle Outfitters, Inc. has recorded an increase in the working capital over the last year. It stood at $407.45 million as at Jan. 28, 2017, up 56.90 percent or $147.75 million from $259.69 million on Jan. 30, 2016. Current ratio was at 1.83 as on Jan. 28, 2017, up from 1.56 on Jan. 30, 2016.
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