Promotions, markdowns cut into American Eagle profit
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American Eagle Outfitters was forced to offer promotions and markdowns to compete for sales during the holiday shopping season, and the result was a hit to the South Side retailer's profit margins.
The company this morning reported profit in the fourth quarter fell to $51.2 million, or 26 cents per share, down from $87 million, or 44 cents per share, in the same quarter a year earlier.
Excluding certain one-time expenses, earnings per share in the three months ended Jan. 28 would have been 35 cents per share. That met analysts expectations which had been lowered after the company revised its earnings guidance downward in January.
Total sales for the quarter rose 14 percent to $1.04 billion. Sales at established stores rose 10 percent.
For the full year, American Eagle reported a profit of $151.7 million, or 78 cents per share, as compared to $140.6 million, or 70 cents per share, a year earlier. Total sales rose 6 percent to $3.16 billion, with sales at established stores up 3 percent.
Meanwhile, American Eagle said February sales got the spring quarter off to a solid start, although the retailer remains cautious since the important spring break and Easter are still ahead.
The company is hoping it won't need to offer as many markdowns to drive sales this year.
American Eagle has scheduled a conference call to discuss its earnings results with analysts this morning.
First Published 2012-03-07 07:45:46