American Eagle beats by $0.03, beats on revs; provides mixed Q3 guidance
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Reports Q2 (Jul) earnings of $0.34 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of $0.31; revenues rose 14.2% year/year to $964.85 mln vs the $937.98 mln S&P Capital IQ Consensus. Comps +9% vs 7% estimate
- By brand, American Eagle's comps +7% and Aerie's comps +27%.
- The gross margin rate increased 170 basis points to 36.6% of revenue compared to adjusted 34.9% last year, primarily reflecting rent leverage.
- Total ending inventories at cost increased 8% to $466 million, in line with the company's expectations. Looking forward, co expects third quarter ending inventory to be up in the high-single digits.
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Co issues downside guidance for Q3, sees EPS of ~$0.45-0.47 vs. $0.49 S&P Capital IQ Consensus.
- "Based on an anticipated comparable sales increase in the high-single digits and total revenue growth in the mid-single digits, reflecting the approximate $40 million revenue shift into the second quarter due to the shifted retail calendar, management expects third quarter 2018 EPS to be approximately $0.45 to $0.47."
- Q3 estimate for revs growth was 3%