Source: Company reports

4Q15 RESULTS

American Eagle Outfitters’ 4Q15 comps were up 4%, compared to flat in the year-ago quarter. Comps were up 3% for the American Eagle Outfitters brand and up 26% for the Aerie brand. SG&A increased by 3% in dollar terms due to higher incentive costs and investments in digital marketing. The increase was offset by a onetime gain on the sale of a previously closed distribution center. EPS of $0.36 in the year-ago quarter excludes a loss of $0.04 from discontinued operations. In 4Q15, the company closed 21 American Eagle Outfitters stores and one Aerie store. The company opened 15 licensed stores in international locations during the quarter, including its first stores in Bahrain and Oman. Total merchandise inventory during the quarter increased by 9%, to $305 million, compared to $279 million last year, consistent with the company’s guidance. The increase was primarily due to earlier receipts, owing to delays caused by the West Coast port slowdown last year.

2015 RESULTS

The company’s revenues in 2015 were $3.5 billion, up 7.3% from the prior year. Comps were up 7%, compared to a 5% decrease the prior year. Comps were up 7% for the American Eagle Outfitters brand and up 20% for the Aerie brand. EPS from continuing operations was $1.09 (which excludes income of $0.02 per share from discontinued operations), up 72.5% from adjusted EPS of $0.63 in 2014 (which adds back $0.17 per share for asset impairment and an overhead reduction charge). In 2015, capital expenditures totaled $153 million.

GUIDANCE

For 1Q16, American Eagle Outfitters expects comps in the mid-single digits for revenues of approximately $734 million (assuming 5% growth), compared to the current consensus estimate of $711 million. EPS guidance is for $0.17–$0.19 (excluding potential asset impairment and restructuring charges), versus the consensus estimate of $0.15 and versus EPS of $0.15 in the year-ago quarter. The company expects inventory at the end of the first quarter to be down by low single digits. In 2016, the company expects capital expenditures of $160–$170 million. Since the beginning of 2014, the company has closed 76 American Eagle Outfitters stores and 26 Aerie stores. The company continues to expect that it will meet its goal of closing 150 stores by the end of 2016.