Gross profit rose 7 per cent to $325 million from $304 million. The gross margin rate of 36.7 per cent compared to 37.0 per cent last year. Rent leverage and improved product costs were offset by increases in markdowns and delivery expense.
The retailer reported EPS of $0.23 for the quarter ended May 4, 2019, compared to $0.22 for the quarter ended May 5, 2018. Excluding restructuring charges of $0.01, the company’s adjusted EPS increased 4 per cent to $0.24, compared to adjusted EPS of $0.23 last year.
Operating income was posted at $48 million, which included $1.5 million of restructuring charges, compared to $51 million last year. Adjusted operating income of $49 million declined 6 per cent when compared to the adjusted $52 million figure last year. The adjusted operating margin of 5.6 per cent compared to 6.4 per cent last year.
“2019 is off to a positive start and we are especially pleased to deliver first quarter sales and EPS growth ahead of our expectations. American Eagle and Aerie continue to leverage strong brand equity, compelling product, and leading customer engagement across stores and digital, resulting in our 17th consecutive quarter of positive comparable sales. AE’s ongoing market share gains are led by its dominant jeans business, and Aerie’s consistent double-digit growth has been fueled by the brand’s strong appeal to both existing and new customers. Looking ahead, we see significant runway for each of our brands. We are committed to improved profit flow through as we begin to lap our 2018 investments, to support continued earnings growth and attractive shareholder returns,” Jay Schottenstein, AEO’s chairman and chief executive officer, said.
Based on an anticipated comparable sales increase in the low single digits, management expects second quarter 2019 EPS to be approximately $0.30 to $0.32. This guidance excludes potential asset impairment and restructuring charges. Last year the company reported EPS of $0.34 for the second quarter. (RR)
Fibre2Fashion News Desk – India