News Flash

AE's comp store sales flat in Q2, higher cotton costs may hit Q3

30 Aug '11

5 min read

Looking ahead to the third quarter, inventories are planned similarly to second quarter end, reflecting the impact of higher product costs, the company's investments in year-round key items and the accessory expansion initiative.

Capital Expenditures
For the second quarter, capital expenditures were $28 million, compared to $20 million last year. Of the second quarter capital expenditures, approximately $20 million related to new and remodeled stores. The balance of the capital expenditures related to distribution center, information technology and other home office projects. The company continues to expect capital expenditures in the range of $90 million to $100 million, with slightly more than half related to new and remodeled stores.

Real Estate
In the second quarter, the company opened two AE, one aerie and six 77kids stores. In addition, the company remodeled 22 stores, bringing the year-to-date total to 54. Store closings in the second quarter consisted of two AE stores. The company continues to expect fiscal 2011 total square footage to increase in the low single-digits. For additional second quarter 2011 actual and fiscal 2011 real estate information, please refer to the accompanying table.

Cash and Investments
The company ended the second quarter with total cash and investments of $515 million.

Future Outlook
Although the company has tempered sales expectations for the second half, particularly during non-peak shopping periods, sales are planned to strengthen from the first half of the year, driven by investments in key items. The back-to-school trend is positive and promotional activity is on plan. As previously noted, higher cotton costs are expected to pressure the second half merchandise margin, and SG&A dollars are planned to increase in the low single-digits for the third quarter and the year.

The company currently expects third quarter 2011 EPS to be in a range of $0.22 to $0.27 per diluted share. This compares to adjusted EPS from continuing operations of $0.29 per diluted share last year, which excludes a realized loss from the sale of investment securities of $0.12 per diluted share. For the year, the company expects EPS to be in the range of $0.85 to $0.95 per diluted share. This compares to adjusted EPS from continuing operations of $1.02 per diluted share last year.

American Eagle Outfitters Inc, through its subsidiaries, offers high-quality, on-trend clothing, accessories and personal care products at affordable prices. The American Eagle Outfitters brand targets 15 to 25 year old girls and guys, with 932 stores in the U.S. and Canada and online at website.

American Eagle Outfitters Inc

More American Eagle Outfitters Inc News... More Apparel/Garments News - United States Of America...