March2,2017
(AEO) 4Q16 Results: Beats by a Penny,
Guides Down for 1Q17
Figure1.AmericanEagleOutfitters4Q16KeyMetrics
4Q16
TotalRevenues(USDBil.)
$1.10
4Q15
YoYChange
$1.11
(0.8)%
GrossMargin
35.4%
35.1%
32bps
AdjustedSG&A/Sales
22.1%
21.9%
14bps
9.8%
9.6%
15bps
$0.39
$0.35
11.6%
AdjustedOperatingMargin
AdjustedEPS(USD)
Source:Companyreports/FungGlobalRetail&Technology
• AmericanEagleOutfittersreportedadjusted4Q16EPSof$0.39,versus$0.35in
theyear-agoquarterandbeatingtheconsensusestimatebyapenny.Revenues
were$1.10billion,down0.8%yearoveryearandslightlybelowtheconsensus
estimate.
• Compswereup0.4%inthequarter,comprisinga1%declinefortheAmerican
Eagletotalbrandanda17%increasefortheAerietotalbrand.
• Thecompany’s1Q17guidancecallsforcompstobeflattodownbylowsingle
digits(versusconsensusofup0.5%)andadjustedEPSof$0.15–$0.17,below
consensusof$0.21.
4Q16Results
AmericanEagleOutfittersreported4Q16totalrevenuesof$1.10billion,down0.8%
yearoveryearandslightlybelowtheconsensusestimate.Totalcompswereup0.4%.
AdjustedEPSwas$0.39,versus$0.35intheyear-agoquarterandbeatingtheconsensus
estimatebyapenny.GAAPEPS,whichincludesassetimpairmentandrestructuring
charges,was$0.30,versus$0.42intheyear-agoquarter.
Highlightsfromthequarterinclude:
• Women’sapparel,men’sandwomen’s,jeansandbottomscontinuedtogrow.
• AmericanEaglejeansgainedmarketshare,rankingnumberoneamong15–25year-olds,witha33%shareofspecialtystorebrands.
• Aeriemaintainedstrongmomentum,postingdouble-digitgrowthandgaining
marketshare.
• Coreintimatesandapparelshowedparticularstrength,andthecompany’s
customerbasecontinuedtogrow.
• Sinceearly2014,thecompany’sprioritieshavecenteredonsuperiormerchandise
infusedwithinnovation,qualityfabricsandoutstandingvalue,andits
omnichannelstrategy,inwhichithasinvestedsignificantly.
DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technology
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2017TheFungGroup.Allrightsreserved.
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March2,2017
PerformancebySegment
• AmericanEagletotalbrandcompsdeclinedby1%,comparedwitha3%increase
intheyear-agoquarter.Compsincreasedby1%forthefullyear,comparedwitha
7%increasetheprioryear.
• Aerietotalbrandcompswereup17%,comparedwith25%intheyear-ago
quarter.Compsincreasedby23%forthefullyear,comparedwith20%theprior
year.
FY16Results
AmericanEagleOutfittersreportedFY16totalrevenuesof$3.61billion,up2.5%year
overyear.Totalcompswereup3%fortheyear.
Full-yearadjustedEPSwas$1.25,versus$1.01inthepreviousyearandbeatingthe
consensusestimatebyapenny.GAAPEPS,whichincludesassetimpairmentand
restructuringcharges,was$1.16,versus$1.11intheprioryear.
Duringthecomingyear,managementplansto:
• Furtherstrengthenthebrick-and-mortarfleetwithselectstoreclosures,marketing
consolidationsandeffortstoimprovestoreproductivity.
• Conductdeeperanalyticalreviewstopositionitsbrandsbetter.
• Worktobetterleverageitsomnichanneltoolstodeliverthebestcustomer
experiencealongwithstrongfinancialreturns.
• Expanditsmarketingcampaignsandlaunchanewloyaltyprogramaimedat
customeracquisitionandretention.
• FuelthegrowthofAeriewithinvestmentsinproducts,marketing,digitalandstore
growth.
Outlook
For1Q17,thecompanyexpects:
• Comparablestoresalestobeflattodownbylowsingledigits.
• AdjustedEPSof$0.15–$0.17,comparedwith$0.22intheyear-agoquarterand
consensusof$0.21.
DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technology
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2017TheFungGroup.Allrightsreserved.
2
March2,2017
DeborahWeinswig,CPA
ManagingDirector
FungGlobalRetail&Technology
NewYork:917.655.6790
HongKong:852.6119.1779
China:86.186.1420.3016
[email protected]
JohnHarmon,CFA
SeniorAnalyst
HongKong:
8thFloor,LiFungTower
888CheungShaWanRoad,Kowloon
HongKong
Tel:85223004406
London:
242–246MaryleboneRoad
London,NW16JQ
UnitedKingdom
Tel:44(0)2076168988
NewYork:
1359Broadway,9thFloor
NewYork,NY10018
Tel:6468397017
FungGlobalRetailTech.com
DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technology
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2017TheFungGroup.Allrightsreserved.
3