Fewer discounts help American Eagle beat estimates

American Eagle Outfitters reported better-than-expected revenue for the fourth quarter, as an improved assortment and fewer discounts drove sales.

The teen apparel retailer said it earned $61.6 million, or 32 cents a share, in the fourth quarter, up from $10.5 million, or 5 cents a share, in the year-earlier period. Revenue grew 3% to $1.07 billion. Same store sales, which includes online sales, were flat, but they beat management forecasts.

“After a tough start to fiscal 2014 ... we achieved a solid fourth quarter, exceeding our expectations. The team executed well through an incredibly challenging macro environment. Improved merchandise assortments, combined with a better customer experience, drove strengthened sales trends, and we successfully reduced promotions," Interim CEO Jay Schottenstein said. “We're encouraged to see momentum continue into the spring season. Improved merchandise assortments, combined with a better customer experience, drove strengthened sales trends, and we successfully reduced promotions.”

Earnings grew to $61.6 million, or 32 cents a share, from $10.5 million, or 5 cents a share, a year earlier. Analysts had expected earnings of 34 cents a share on revenue of $1.06 billion. For the first quarter, the company expects earnings between 9 cents to 12 cents a share, above the 7 cents that analysts expected. The company also announced that it has promoted CMOs Chad Kessler and Jennifer Foyle to the positions of Global Brand Presidents for the American Eagle Outfitters and Aerie brands, respectively.

“I am absolutely delighted to announce the promotions of these highly capable and talented leaders,” said Interim President Roger Markfield. “Chad has been instrumental to our business improvement, driving stronger AE merchandise assortments, rooted in outstanding quality, innovation and affordability. He has the right brand vision, creative expertise and knows our customers well. Chad has an outstanding creative team and together they will take the brand forward as a global destination for casual American style.”

American Eagle Outfitters Inc. operates more than 1,000 stores in the United States, Canada, Mexico, China, Hong Kong and the United Kingdom.