(Corrects analyst's surname in paragraph 9 to Siegel from
* Forecasts Q4 adj. EPS 37-39 cents vs. est. 45 cents
* Expects Q4 comp sales to be flat or rise in low single
* Q3 comp sales up 2 pct vs. est. of 2.9 pct rise
* Shares down 15.1 pct at $16.06
Nov 30 American Eagle Outfitters Inc
forecast a much lower-than-expected fourth-quarter profit,
joining rivals Abercrombie & Fitch Co and Gap Inc
in flagging a tough climate for retailers in the crucial
holiday shopping season.
The teen apparel retailer's shares sank 15.1 percent to
$16.06 in morning trading on Wednesday.
American Eagle also forecast comparable sales to be flat or
increase in the low single digits in the fourth quarter compared
with a 4 percent rise in the year-earlier period.
"The retail climate, particularly in malls, is tough and the
pace of traffic is choppy. We're therefore taking a cautious
view," Chief Financial Officer Bob Madore said on a conference
The company forecast fourth-quarter adjusted profit of 37-39
cents per share, well below analysts' average estimate of 45
cents, according to Thomson Reuters I/B/E/S.
The American Eagle brand ran earlier and deeper promotions
during Black Friday and Cyber Monday, Wolfe Research analyst
Adrienne Yih wrote in a note. "We believe AEO will continue to
run elevated promotions throughout 4Q16 to drive traffic but
will result in lower quality sales."
Abercrombie said last week it expected holiday-quarter sales
to be challenging, while Gap forecast a further drop in traffic
during the period, raising concerns that apparel retailers were
in for another tough holiday season as fewer shoppers visit
malls and continue to spend less on clothes.
Comparable sales of American Eagle's Aerie brand, which
sells intimate apparel and personal care products for women,
rose 21 percent in the third quarter ended Oct. 29, beating the
average analyst estimate of a 17.4 percent rise, according to
research firm Consensus Metrix.
"Aerie continues to post positive same-store sales. However,
the American Eagle brand is so much larger and in that concept
decelerates the (positive) impact on the comps," Simeon Siegel,
retail analyst at Instinet Equity Research said.
American Eagle reported a smaller-than-expected 2 percent
rise in quarterly comparable sales amid a "tough retail
climate." Analysts on average expected a 2.9 percent rise.
Net revenue rose 2.34 percent to $940.6 million, in line
with the average analyst estimate.
American Eagle's net profit rose to $75.76 million, or 41
cents per share, from $74.11 million, or 38 cents per share, a
(Reporting by Gayathree Ganesan in Bengaluru; Additional
reporting by Sruthi Ramakrishnan; Editing by Martina D'Couto)