American Eagle disappoints in Q3, names merchandising exec
Pittsburgh – American Eagle reported disappointing results for the third quarter of fiscal 2013. Net income plummeted 68% to $24.9 million from $78.6 million, missing Wall Street projections.
Total net revenue of $857 million decreased 6% compared to $910 million last year. Same-store sales fell 5%.
American Eagle cited having fewer weeks in the third quarter of 2013 than in the same quarter of the prior year, as well as non-cash charges associated with the company’s previously disclosed plans to close its Warrendale, Pa., distribution center upon the opening of its new facility in Hazleton, Pa., as affecting its financial performance.
American Eagle also said intense holiday discounting negatively impacted fiscal results. The company predicts a mid single-digit percentage decline in same-store sales for the fourth quarter of fiscal 2013.
“Our financial performance is clearly unsatisfactory and not consistent with our objectives,” said Robert Hanson, CEO of American Eagle. “As we continue to navigate through an intensely promotional North American retail landscape, we are making improvements in merchandising and marketing, while aggressively pursuing efficiency gains, expense reductions and ensuring disciplined inventory management. We are continuing to invest in important areas of growth including omni-channel, global expansion and factory stores; all high-return segments, which diversify our business and will be key drivers of our future growth and success.”
American Eagle also appointed Chad Kessler as executive VP, chief merchandising and design officer for its namesake brand, reporting to Hanson. Kessler begins in his new role on Feb. 3, 2014, succeeding Fred Grover, who will stay with the company to ensure a smooth transition through mid-year, at which point he will retire.