Higher sales and lower markdowns of its teen clothing and accessories have combined to end the fourth quarter on a high note for retailer American Eagle Outfitters Inc.
The company booked a profit of $59.3m or $0.28 a share in the three months to 30 January, up 81.3% from $32.7m or $0.16 per share, a year ago.
Excluding one-time impairment charges related to the company’s decision on Tuesday (9 March) to shutter its loss-making Martin+Osa business, earnings were $0.33 per share, the company said.
Sales in the quarter rose 7% to $972.0m from $905.7m last time, and comparable store sales were up 5%.
Gross profit rose to $388.2m or 39.9% of sales, from $311.6m or 34.4% of sales last year. And lower markdowns helped lift the merchandise margin by 600 basis points.
“During the quarter, we were especially pleased with the improvement in the AE brand,” said CEO Jim O’Donnell.
“Our assortments were stronger, and the price/value offering was more compelling than ever.”
For the year, profit slipped 5.6% to $169.0m, down from $179.1m the year before.
While total revenues for the 12 months edged up slightly to $2.991bn, from $2.989bn last time, comparable store sales fell 4%.
The company’s direct business, meanwhile, saw sales soar 12% to $344.3m, from $307.0m a year earlier.
Looking ahead, O’Donnell pledged to “build upon the momentum and maximise the AE brand, continuing to re-capture market share.”
Aiming for “a minimum of mid-teen operating margin by 2011,” according to chief financial officer Joan Hilson, the retailer is eyeing top line sales growth, on-going margin recovery, and a focus on brands including AE, aerie and 77 kids.
First quarter earnings are seen in a range of $0.15 to $0.17 per diluted share.
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