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American Eagle Outfitters reports strong Q1

American Eagle Outfitters this week reported EPS of $0.15 for Q1..

May 22, 2015

American Eagle Outfitters this week reported EPS of $0.15 for the first quarter ended May 2, 2015, a significant increase from EPS of $0.02 for the comparable quarter last year.

"Our strong first quarter results reflected outstanding merchandise and customer-focused execution. Both AE and aerie performed well, achieving higher sales and earnings, proving successful in a price promotional retail climate," Jay Schottenstein, AE Interim CEO, said in a statement. "We will continue to raise the bar by offering great product quality, innovation, style and value. Across the organization, we are focused on the market opportunity to leverage our competitive strengths in merchandising, new technologies and capabilities to gain further market share and deliver earnings growth."

First Quarter 2015 results

• Total net revenue increased 8 percent to $700 million from $646 million last year.
• Consolidated comparable sales increased 7 percent, compared to a 10 percent decrease last year.
• Gross profit increased 16 percent to $262 million and rose 260 basis points to 37.5 percent as a rate to revenue. A reduction in the markdown rate led to approximately 290 basis points of merchandise margin expansion, which was partially offset by 30 basis points of buying, occupancy and warehousing.
• Selling, general and administrative expense of $185 million was flat to last year. As a rate to revenue, SG&A leveraged 210 basis points to 26.5 percent compared to 28.6 percent last year. Our expense reduction initiatives offset increases in incentive and variable selling expense, driven by strong sales performance.
• Operating income increased to $42 million from $8 million last year, and the operating margin expanded 470 basis points to 6.0 percent as a rate to revenue.
• Other income of $6 million is primarily comprised of currency gains related to cash held in Canadian dollars.
• EPS of $0.15, a significant increase from EPS of $0.02 last year.

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