American Eagle Outfitters Inc (NYSE:AEO) shares gained substantially on the release of latest quarterly figures.
The Pittsburgh-based company reported Earnings per Share of ($1.54) for the 13 weeks ended May 2, 2020. This compared to $0.23 for the 13 weeks ended May 4, 2019.
Adjusted EPS of ($0.84) this year excluded $0.70 of impairment and restructuring charges discussed below and compared to adjusted EPS of $0.24 last year, which excluded $0.01 of restructuring costs.
Total net revenue for the quarter decreased $335 million, or 38% to $552 million compared to $886 million for the 13 weeks ended May 4, 2019.
Gross profit was $28 million compared to $325 million last year. The gross margin rate of 5.1% compared to 36.7% last year. The gross profit dollar decline primarily reflected the reduction in store revenue, markdowns and promotions to clear through AE spring and summer goods, and $60 million in inventory provisions. The company also experienced buying, occupancy and warehousing pressure as a rate to revenue, due to the sales decline.
CEO Jay Schottenstein commented, "In the midst of this unprecedented crisis, the strong character of our company and associates has been apparent. I’m extremely proud of the team’s agility and humanity as we have taken immediate actions to ensure the health and safety of our people, preserve financial strength and prepare AEO for a new future.
"Store closures and aggressive inventory liquidation had a significant impact on our first quarter financials. Yet customer engagement remained high and digital demand accelerated, well-exceeding our expectations."
AEO took on $1.58, or 15.4%, to $11.88.
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