FILE PHOTO: An Omani man passes in front of an American fashion brand, American Eagle Outfitters in City Center Mall in Muscat, Oman, February 11, 2019. REUTERS/Hamad I Mohammed
Apparel retailer American Eagle Outfitters Inc (AEO.N) forecast third-quarter profit below estimates on Wednesday after reporting disappointing quarterly same-store sales due to weak performance in certain seasonal clothing lines.
Shares of the Pittsburgh-based company fell 6.5% in premarket trading. The stock has lost about 15.8% of its value so far this year.
The weak forecast comes as the retailer faces intense competition from European brands like H&M and Zara as well as American apparel makers who are launching trendier styles to woo young shoppers.
American Eagle said it expects to record an adjusted profit of about 47 cents to 49 cents per share in the third quarter. Analysts forecast the retailer to earn 52 cents per share, according to IBES data from Refinitiv.
Sales at stores open for at least a year rose 2% in the second quarter ended August 3, below the analyst average estimate of a 3.05% increase.
Net income rose to $64.98 million, or 38 cents per share, from $60.33 million, or 34 cents per share, a year earlier.
Reporting by Aditi Sebastian in Bengaluru; Editing by Shinjini Ganguli and Arun Koyyur