For the reported period, the consolidated comparable sales increased 8 per cent over the comparable period ending November 4, 2017, following a 3 per cent increase last year. By brand, American Eagle comparable sales rose 5 per cent, building on a 1 per cent increase last year. Aerie’s comparable sales increased 32 per cent, following a 19 per cent increase last year, marking the 16th consecutive quarter of double-digit comp growth.
Gross profit went up7 per cent to $399 million from gross profit of $375 million last year. The gross margin rate increased 80 basis points to 39.8 per cent of revenue compared to 39.0 per cent last year. Lower markdowns and rent leverage were slightly offset by increased delivery costs.
"I am proud to announce another outstanding performance this period for AEO, marking record sales and our first $1 billion third quarter. American Eagle and Aerie had extremely well-executed back-to-school and fall seasons, fueling strong sales across stores and double-digit growth in digital, on lower promotional activity across channels. The holiday season is off to a positive start and I’d like to thank our teams for the exceptional effort and enthusiasm they are bringing to this holiday season. Looking forward, we will leverage our momentum and brand strength as we continue to drive growth and deliver returns to our shareholders," Jay Schottenstein, AEO’s chief executive officer, said.
During the quarter, the company opened 5 American Eagle stores and closed 3, ending with 941 stores, including 142 Aerie side-by-side locations. The company opened 2 Aerie stand-alone stores and closed 1, ending with 110 Aerie stand-alone stores. Internationally, the company ended the quarter with 223 licensed stores.
The company expects fourth quarter EPS of $0.40 to $0.42, based on comparable sales in the positive mid-single digits and total revenue growth in the low single digits. This guidance reflects approximately $60 million of lost revenue and $0.07 of reduced EPS due to operating with one less week in the fourth quarter than last year as a result of the 53rd week in fiscal 2017. The guidance assumes a tax rate of approximately 27 per cent due to the impact of recently updated tax reform transition tax legislation and other discrete items. Guidance excludes potential asset impairment and restructuring charges. Last year, the company reported fourth quarter EPS of $0.52, which included approximately $0.08 per share of tax benefit. Excluding these items, last year’s fourth quarter adjusted EPS was $0.44. (RR)
Fibre2Fashion News Desk – India