Earnings preview: What to watch during American Eagle Outfitters’ Q1 2019 results

American Eagle Outfitters Inc. (NYSE: AEO) is scheduled to report first quarter 2019 earnings results on Wednesday, June 5, before market open. Earnings is estimated to decline 8.7% year-over-year to $0.21 per share while revenue is projected to increase nearly 4% to $855 million.

The company has consistently topped earnings forecasts for the trailing four quarters and can be expected to continue this trend in the first quarter as well. American Eagle’s top line results in the first quarter are likely to benefit from the company’s significant investments in its store network and digital channels.

The retailer has seen strong comparable sales growth over the past several quarters and expects comp sales to increase in the low single digits for the first quarter. American Eagle has been seeing healthy growth in its brands and this strength is expected to boost the company’s performance in the first quarter. However, higher expenses could impact margins negatively.

In the fourth quarter, American Eagle beat earnings estimates while revenues fell short. Revenues inched up by 1% to $1.24 billion while adjusted EPS was $0.44. Comparable sales rose 6%. For the Aerie brand, comp sales grew 23% while for the AE brand, they grew 3%.

For the first quarter of 2019, the company has guided for EPS to be around $0.19 to $0.21. At the end of fiscal 2019, American Eagle expects its store count to be in the range of 1,072 to 1,092 stores.

American Eagle’s shares have fallen 5% so far this year and over 20% in the trailing 52 weeks.

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