Group 1 - Albany International (AIN) has been added to the Zacks Rank 5 (Strong Sell) List, with a 13.2% downward revision in the consensus estimate for its current year earnings over the last 60 days [1] - American Eagle Outfitters (AEO) is also on the Zacks Rank 5 (Strong Sell) List, experiencing a 12.2% downward revision in the consensus estimate for its current year earnings over the last 60 days [2] - ASE Technology (ASX) has been included in the Zacks Rank 5 (Strong Sell) List, with a nearly 6.2% downward revision in the consensus estimate for its current year earnings over the last 60 days [2]

Core Viewpoint - Telsey Advisory Group analyst Dana Telsey has reiterated a Market Perform rating on American Eagle Outfitters Inc (AEO) and reduced the price target from $18 to $12, reflecting concerns over the company's future performance amid a challenging macro environment [1]. Financial Performance - AEO's quarterly sales decreased by 4.4% to $1.605 billion, which was slightly better than the anticipated 4.6% decline [1]. - The gross margin remained flat at 37.3%, exceeding expectations, while SG&A expenses improved due to lower compensation costs [2]. - Operating income reached $142.3 million, surpassing both consensus and guidance, marking the highest operating income in over a decade [2]. Future Outlook - The FY25 outlook for AEO is weaker than expected, with a projected low single-digit revenue decline, contrasting with the previous consensus of a 3% increase [3]. - The company has cited slower demand and cold weather impacting first-quarter FY25 sales, although it anticipates improvement by spring [3]. - Sales have softened due to a weaker consumer environment and unfavorable weather, with limited visibility for improvement [4]. Guidance and Challenges - AEO's guidance indicates an expected decline in gross margin and a contraction in SG&A, with operating income projected between $360 million and $375 million, significantly lower than the consensus estimate of $454 million [4]. - Despite management's efforts to boost sales and reduce costs, both FY25 and first-quarter guidance are well below prior expectations [4]. - The uncertain macroeconomic backdrop poses a significant challenge, although AEO has shown strong performance during peak periods [5].

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American Eagle Outfitters (AEO) Q4 2025 Earnings Call March 13, 2025 12:07 AM ET Company Participants Judy Meehan - Vice President of Corporate Communications & Investor RelationsJay Schottenstein - Executive Chairman of the Board & CEOJennifer Foyle - President and Executive Creative Director of AE & AerieMike Mathias - Executive VP & CFOJay Sole - Managing DirectorAmanda Douglas - VP - Equity ResearchJanet Kloppenburg - PresidentPaul Lejuez - Managing DirectorDana Telsey - CEO and Chief Research OfficerMa ...

Core Insights - American Eagle Outfitters (AEO) reported fourth-quarter 2024 earnings with an EPS of $0.54, surpassing the forecast of $0.50, while revenue declined 4.4% year-over-year to $1.6 billion [2][4] - The company achieved a remarkable 1,700% increase in operating income, reaching $142 million, reflecting strong financial discipline and operational efficiency [3][4][7] - Management's forward guidance indicates a cautious outlook, anticipating a mid-single-digit decline in revenue for Q1 2025 and a modest contraction for the fiscal year [10][11] Financial Performance - Q4 2024 metrics include: - EPS (diluted): $0.54, up from $0.03 in Q4 2023 [4] - Revenue: $1.6 billion, down from $1.68 billion in Q4 2023 [4] - Operating income: $142 million, significantly up from $9 million in Q4 2023 [4] - Gross margin: 37.3%, slightly improved from 36.6% in Q4 2023 [4] Brand Performance - Aerie brand showed strong performance with a 6% growth in comparable sales, contributing to record revenue [7] - The American Eagle brand experienced flat performance with only a 1% increase in comparable sales, and revenue decreased from $1.066 billion to $1.001 billion [8] Strategic Initiatives - AEO is focusing on expanding the Aerie brand, aiming for $2 billion in revenue, and enhancing its omnichannel strategy to improve customer engagement [5][6] - The company is committed to sustainability and effective inventory management to bolster brand loyalty and competitiveness [6] Shareholder Returns - AEO returned over $190 million to shareholders in 2024 through share repurchases and authorized an additional 50 million shares for buybacks [9] - Capital expenditures for the year totaled $223 million, indicating a focus on future growth through infrastructure and capacity enhancements [9] Market Outlook - Management anticipates a leaner revenue decline in Q1 2025 and a low-single-digit contraction for the fiscal year, while projecting operating income between $360 million and $375 million [10] - The strategic focus remains on branding, digital transformation, and international market expansion to sustain growth potential [11][12]

Financial Performance - Fourth quarter comparable sales growth of 3% and operating income of $142 million[1] - Fiscal year 2024 total net revenue of $5.3 billion, a 1% increase, with comparable sales growth of 4%[9] - Aerie comparable sales increased by 6%, while American Eagle comparable sales grew by 1% in fiscal year 2024[9] - Gross profit for fiscal year 2024 was $2.1 billion, with a gross margin of 39.2%[9] - Total net revenue for the fourth quarter ended February 1, 2025, was $1,604,633, a decrease of 4.4% from $1,678,910 in the same quarter of the previous year[27] - Operating income for the fiscal year ended February 1, 2025, was $427,303, representing 8.0% of total revenue, up from 4.2% ($222,717) in the previous fiscal year[29] - Net income for the fiscal year ended February 1, 2025, was $329,380, or 6.2% of total revenue, compared to $170,038, or 3.2% in the prior year[29] - Total net revenue for the fiscal year ended February 1, 2025, was $5,328,652, a slight increase from $5,261,770 in the previous year[29] Shareholder Returns - The company returned over $190 million to shareholders through share repurchases in 2024, with an additional 50 million shares authorized for repurchase[1][12] Expenses and Profitability - Selling, general and administrative expenses for fiscal year 2024 were approximately $1.4 billion, roughly in line with the previous year[9] - GAAP diluted earnings per share for fiscal year 2024 was $1.68, with adjusted diluted earnings per share at $1.74[9] - The company reported a diluted earnings per share of $1.68 for the fiscal year ended February 1, 2025, compared to $0.86 in the previous year[29] Inventory and Capital Expenditures - Total ending inventory decreased by 1% to $637 million, indicating a healthy inventory position for the Spring season[10] - Capital expenditures for fiscal year 2024 totaled $223 million, with expectations of approximately $300 million for 2025[14] Store Operations - The company opened 22 new AE Brand stores and 22 Aerie stores during the fiscal year, while closing 45 AE Brand stores and 13 Aerie stores[33] - Total consolidated stores remained stable at 1,172 at the end of the fiscal year, with 371 international license locations[33] Future Outlook - The first quarter of 2025 is expected to see a mid-single digit decline in revenue, while fiscal year 2025 anticipates a low-single digit decline[16] Taxation - The effective tax rate for the fiscal year ended February 1, 2025, was 25.5%[36] Gross Profit Margin - Gross profit margin improved to 37.3% in Q4 2025 from 36.6% in Q4 2024, with gross profit amounting to $599,175 compared to $614,586[27] Aerie Segment Performance - Aerie segment revenue for Q4 2025 was $539,673, showing a slight increase from $537,462 in Q4 2024[31]

Core Viewpoint - American Eagle has warned investors of a slower start to 2025, indicating a pullback in consumer spending and a challenging operating environment [1][2][3] Company Performance - The company reported a net income of $104 million, or 54 cents per share, for the fiscal fourth quarter, compared to $6.31 million, or 3 cents per share, a year earlier [5] - Sales for the quarter were $1.60 billion, slightly down from $1.68 billion a year prior, impacted by an extra week in the previous year [6][7] - Earnings per share exceeded expectations at 54 cents, while revenue met expectations at $1.60 billion [7] Future Outlook - For the current quarter, American Eagle anticipates a mid-single-digit decline in sales, contrasting with analyst expectations of a 1.3% revenue increase [6] - The company expects a low single-digit decline in sales for the full year, while analysts had projected a 3% growth [6] - CEO Jay Schottenstein mentioned proactive steps to strengthen the top-line, manage inventory, and reduce expenses amid uncertain consumer conditions [2][3] Industry Context - Other retailers have also issued weak guidance and cautious commentary, suggesting a broader trend of slowing consumer demand due to persistent inflation and tariff concerns [3][4]

Financial Performance - American Eagle Outfitters is expected to report fourth-quarter earnings of 51 cents per share, a decrease from 61 cents per share in the same period last year [1] - The company projects quarterly revenue of $1.6 billion, down from $1.68 billion a year earlier [1] Dividend Information - American Eagle offers an annual dividend yield of 4.35%, translating to a quarterly dividend of 13 cents per share, or $0.50 annually [2] - To achieve a monthly income of $500 from dividends, an investor would need to own approximately 12,000 shares, equating to a total investment of about $137,880 [3] - For a more conservative monthly income goal of $100, an investor would need 2,400 shares, requiring an investment of approximately $27,576 [4] Stock Price and Dividend Yield - The dividend yield can fluctuate based on changes in the stock price and dividend payments [4][5] - For instance, if a stock's price increases, the dividend yield decreases, and vice versa [5] - American Eagle's shares fell by 5% to close at $11.49 on Tuesday [6]

Core Viewpoint - American Eagle Outfitters, Inc. (AEO) is expected to report a decline in both revenues and earnings for the fourth quarter of fiscal 2024, with a consensus estimate of $1.61 billion in revenues, representing a 4.3% decrease year-over-year, and earnings per share projected at 50 cents, an 18% decline from the previous year [2][5]. Financial Performance - The consensus estimate for AEO's fiscal fourth-quarter revenues is $1.61 billion, indicating a 4.3% decline from the prior year's figure [2] - The earnings consensus is set at 50 cents per share, down 18% from 61 cents reported in the same quarter last year [2] - In the last reported quarter, AEO's earnings exceeded the consensus estimate by 4.4%, with an average earnings surprise of 12.6% over the last four quarters [3] Sales and Profitability - Comparable sales for the fourth quarter-to-date through January 4, 2025, increased in low-single digits, surpassing the earlier outlook of positive 1% [6] - The company anticipates an operating profit of nearly $135 million for the fourth quarter, up from previous guidance of $125-$130 million [6] - AEO's strategic initiatives are expected to support improved profitability compared to prior projections [5][8] Strategic Initiatives - AEO is implementing its "Powering Profitable Growth" plan, focusing on amplifying brands, optimizing operations, and maintaining financial discipline [8] - The company is committed to cost management and operational efficiency, which are expected to positively impact fourth-quarter results [7][10] Market Position and Valuation - AEO's shares are trading at a forward 12-month price-to-earnings ratio of 6.80, below the five-year median of 12.36 and the industry average of 16.94, indicating an attractive investment opportunity [12] - The stock currently holds a Value Score of A, further validating its appeal to investors [12] Challenges - AEO has faced higher markdowns and increased costs related to buying, occupancy, and warehousing, which are expected to negatively impact margins in the upcoming quarter [9] - The company anticipates comparable sales growth of about 2% for the fourth quarter, a decrease from the 8% rise in the prior year [7][11]

Company Performance - American Eagle Outfitters (AEO) ended the recent trading session at $12.12, showing a +1.08% change from the previous day's closing price, which is below the S&P 500's daily gain of 1.12% [1] - Over the past month, AEO shares have decreased by 24.02%, significantly underperforming the Retail-Wholesale sector's loss of 6.55% and the S&P 500's loss of 4.13% [1] Upcoming Earnings - The company's earnings report is scheduled for March 12, 2025, with an expected EPS of $0.50, reflecting an 18.03% decline from the same quarter last year [2] - Revenue is forecasted to be $1.61 billion, indicating a 4.34% decrease compared to the year-ago quarter [2] Analyst Estimates - Recent changes to analyst estimates for AEO are important as they reflect near-term business trends, with positive revisions indicating analysts' confidence in the company's performance [3] - The Zacks Consensus EPS estimate has decreased by 0.48% over the past month, and AEO currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - AEO has a Forward P/E ratio of 6.68, which is a discount compared to the industry's average Forward P/E of 14.12 [6] - The company has a PEG ratio of 0.71, lower than the industry average PEG ratio of 0.98 [6] Industry Context - The Retail - Apparel and Shoes industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 65, placing it in the top 26% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]