Teen retailer posts mixed Q1 results

American Eagle Outfitters’ profit shrunk in the first quarter amid charges and discounting.



Net income totaled $25.2 million, or 14 cents per share, compared to $40.4 million, or 22 cents per share, in the year-ago period. The retailer reported charges of $5.4 million related to severance and related charges due to corporate restructuring and its previously announced initiative to explore the closure or conversion of company owned and operated stores in Hong Kong, China, and the United Kingdom to licensed partnerships. American Eagle’s adjusted EPS was $0.16, which narrowly missed estimates.



Total revenue in the quarter, ended April 29, edged up 2% to a better-than-expected $762 million. Same-store sales rose 2% amid strong demand for its Aerie brand.



"The first quarter results reflected mall traffic headwinds, especially early in the quarter, with improved trends over Easter and a strong digital business throughout,” said CEO Jay Schottenstein. “As we look ahead, we are taking the right steps to improve our results and adjust our business for today’s rapidly evolving retail environment. We are creating efficiencies across our organization, as we aim to continue capitalizing on the strength of our brands, product leadership and other competitive advantages. The six million shares repurchased this quarter reflects the company’s strong cash flow, healthy balance sheet and confidence in our brands and long-term strategic initiatives."



In fiscal 2017, American Eagle plans to open 35 American Eagle Outfitters and Aerie stores throughout the U.S., Canada and Mexico. It plans to close between 25 and 40 store locations.