Proactive Investors - American Eagle Outfitters Inc. (NYSE:AEO) shares plunged over 16% in premarket trade on Tuesday after the apparel brand forecast fourth-quarter operating income of between $105 million to $115 million, with the midpoint of this range below Wall Street estimates of $114 million.
This overshadowed the company’s better-than-expected 3Q results, with revenue of $1.3 billion and earnings per share of $0.49, beating estimates of $1.28 billion and $0.48 billion respectively.
Total revenue was up 5%, with American Eagle revenue up 2% to $857 million and revenue from Aerie, American Eagle’s intimate apparel sub-brand, up 12% to $393 million.
The retailer also raised its full-year sales forecast to mid-single-digit growth over the previous financial year, up from its prior guidance for revenue to increase by a low-single-digit percentage.
It forecasts operating income in the range of $340 million to $350 million, at the high end of its prior guidance range of $325 million to $350 million, on “strengthened demand and continued profit improvement.”
“I am pleased with our third quarter results which demonstrated the strength of our brands and reflected continued progress on our growth and profit improvement initiatives,” American Eagle CEO Jay Schottenstein said in a statement.
"Momentum has continued across the business into the fourth quarter, driven by strong holiday assortments, engaging marketing campaigns and solid execution, supporting our improved outlook for the rest of the year.”