American Eagle Outfitters Inc. and Urban Outfitters Inc. both surged in late trading after topping first-quarter earnings estimates, bucking a trend of apparel companies posting weak results.
NEW YORK, United States — American Eagle Outfitters Inc. and Urban Outfitters Inc. both surged in late trading after topping first-quarter earnings estimates, bucking a trend of apparel companies posting weak results.
At American Eagle, earnings amounted to 22 cents a share in the period, which ended April 30. The Pittsburgh-based chain had forecast profit of 17 cents to 19 cents, with analysts’ estimates falling in the middle of that range.
American Eagle is capitalising on demand for its denim and bohemian fashions, even as the broader apparel industry suffers. The retailer also has been able to rely less on discounts while it jumps on emerging trends such as lacy bralettes, a casual undergarment that it sells through its Aerie underwear chain.
Same-store sales grew six percent in the period, outpacing the 4.7 percent predicted by analysts. The company’s Aerie brand performed especially well, with a gain of 32 percent. American Eagle expects earnings of 20 cents to 21 cents in the second quarter, excluding some items. Analysts have estimated 20 cents.
The stock rose as much as 18 percent to $15.74 in extended trading. Shares of the retailer had been down 14 percent this year through Wednesday’s close.
Urban Outfitters, meanwhile, posted same-store sales growth of one percent in the first quarter. Analysts had estimated a 0.5 percent decline, according to Consensus Metrix.
Better marketing and fewer markdowns at the Urban Outfitters and Anthropologie chains boosted the results, the Philadelphia-based company said in a statement Wednesday. Total revenue in the quarter was $762.6 million, more than the $758.8 million analysts predicted. Urban Outfitters’ shares surged as much as 12 percent to $27.60 in late trading.
Not all of the day’s earnings were positive. L Brands Inc., which owns the Victoria’s Secret chain, cut its full-year profit forecast to $3.60 to $3.80 a share, down from an earlier range of as much as $4.10. Analysts had estimated $4.04 a share on average. Shares of L Brands dropped as much as 4.4 percent to $61 after the results were released.
Separately, American Eagle also named Kyle Andrew to the role of chief marketing officer. The veteran of Kate Spade, Kenneth Cole and Gap Inc., will take the new job on June 6.
By Lindsey Rupp; editors: Nick Turner and John Lear.