Shares of specialty retailer American Eagle Outfitters, Inc. (AEO) are rising more than 14% Tuesday morning after reporting better-than-expected profit in the third quarter.
The company reported profit of $81.27 million or $0.42 per share, lower than 152.22 million or $0.74 per share in the same quarter a year ago. Analysts, on average were expecting profit of $0.22 per share.
Total revenue of $1.2 billion was down 3% year-on-year. The consensus estimate was for $1.21 billion.
For the fourth quarter, American Eagle expects gross margin to be in the range of 32% to 33%, at the higher end of previous guidance.
The company said it remains on track to deliver $100 million in reductions to the original plan and expects SG&A dollars in the fourth quarter to be approximately flat to last year.
“Our inventory is in good shape, up 8% to last year, with progress continuing into the fourth quarter. We are staying disciplined and focused on improving profitability and cash flow, while maintaining a healthy balance sheet,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.
AEO, currently at $14.90, has traded in the range of $9.46-$29.19 in the last 52 weeks.
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