American Eagle Outfitters Q4 profit rises, plans to close Martin+Osa brand

Pittsburgh American Eagle Outfitters on Wednesday said its fiscal fourth-quarter profit rose 81% as demand for its teen clothing and accessories improved.

Profit for the three months ended Jan. 30 rose to $59.3 million, from $32.7 million in the same period last year.

American Eagle said late Tuesday it would close the underperforming Martin+Osa adult-focused brand. The line was comprised of 28 stores and a Web site. Analysts said the line had become a distraction.

BMO Capital Markets analyst John Morris said the move to close Martin+Osa was a "major positive" since the line was "a sizable drag" on the company's results, generating an after-tax loss of $44 million in 2009.

Meanwhile, American Eagle Outfitters reported that its quarterly revenue rose 7% to $972 million from $905.7 million. Same-store sales rose 5% during the quarter.

For the full year, profit fell 6% to $169 million from $179.1 million in 2008. Revenue was nearly flat at $2.99 billion.

American Eagle benefited during the recession, taking market share from higher-priced rivals such as Abercrombie & Fitch as consumers traded down to its lower-price offerings.

CFO Joan Hilson said the company plans to improve its margins each quarter by having higher sales and focusing on new concepts like its 77kids stores aimed at young children and its aerie intimates and sleepwear lines.