* Says to shut additional 150 stores over next 3 years
* Sees breakven/share in current quarter vs est. EPS $0.04
* Expects same-store sales to fall in high single-digit pct
* First-quarter comparable-store sales down 10 pct
* Shares fall as much as 7 pct
(Adds CEO, analysts' comments, updates shares)
By Shailaja Sharma
May 21 American Eagle Outfitters Inc
forecast another quarter of falling comparable-store sales and
said it would close 150 more stores in North America as it
continues to struggle to attract fickle teen shoppers.
American Eagle's shares fell as much as 7 percent to a more
than 30-month low in midday trading.
The company, which targets customers aged between 15 and 25,
said it expected comparable sales to decline in high
single-digit percentage range in the second quarter.
American Eagle, like rivals Urban Outfitters Inc
and Abercrombie & Fitch Co, has been losing out to
fast-fashion retailers such as H&M and Zara, which bring in
latest styles from the runway to its stores within weeks.
Buckingham Research Group analyst Jennifer Davis said
American Eagle's collection was one of the weakest among its
peers and the company relied too much on its logo-centric
clothes, which young shoppers are now less interested.
"Given American Eagle's lackluster product assortment and
excess inventory, we expect sales and gross margins to remain
under pressure for at least the next several quarters," Davis
wrote in a note to clients.
The company will improve products, upgrade its website and
release a new mobile app to revive sales, Jay Schottenstein,
interim chief executive, said on a post-earnings conference
American Eagle operates more than 1,000 stores in the United
States, Canada, Mexico, China and Hong Kong under the American
Eagle and aerie brands.
The company said the 150 stores it planned to close over the
next three years include nearly 100 American Eagle stores. This
year alone, it plans to close about 50 American Eagle stores and
20 aerie stores. It had closed a total of 42 stores in 2013.
American Eagle's consolidated comparable sales decreased 10
percent in the first quarter ended May 3, higher than the 7.8
percent decline expected by analysts polled by Consensus Metrix.
The company said it expected to break even on a per-share
basis, excluding items, in the current quarter, missing
analysts' estimate of a 4 cent profit.
"Clearly the magnitude (of the forecast miss) is
disappointing especially in an environment where other retailers
have indicated improvements," SunTrust Robinson Humphrey Capital
Markets analyst Pamela Quintiliano told Reuters.
Victoria's Secret parent L Brands Inc raised its
quarterly profit forecast while Gap Inc gave a profit
forecast that surpassed Wall Street expectations.
American Eagle's net income fell 86 percent to $3.87
million, or 2 cents per share, in the first quarter from a year
Analysts on average had expected breakeven per share,
according to Thomson Reuters I/B/E/S.
Total revenue fell 4.9 percent to $646.1 million, missing
the average analyst estimate of $647.7 million.
American Eagle's shares were down 6.6 percent at $10.58 in
early afternoon trading.
(Reporting by Shailaja Sharma in Bangalore; Editing by Savio
D'Souza and Maju Samuel)