American Eagle first quarter earnings decline - Pittsburgh Business Times:

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Net income for the quartedr ended May 2was $22.0 million, or 11 centss per share, compared to $43.9 million, or 21 for the year-ago quarter. The teen clothinbg retailer, based on Pittsburgh's Sout Side, saw total sales decline 4 percent year-over-year, to $612 million, from $640.2 million. Comparable-store sales for American Eagle (NYSE:AEO) were down 10 percentt for the quarter, compared to a 6 percen t decline in the same quartet ayear ago. "While we are never satisfiefd with anearnings decline, ther are early indications that the businessa is stablizing," CEO Jim O'Donnell said in a statement.
He citex improvement in the AE branc and categories like dressesand accessories. Analystzs were expecting earnings per share of 7 in linewith management’s recent guidance, as the companuy seeks to improve its women’s apparel and maintain its salew during a time when most retailerse are facing difficult sales declines and mallsa are drawing fewer customers. Jennifefr Black, a principal of Oregon-based research compang JenniferBlack & Associates LLC, saw reasonm for optimism. “I think it’ a very democratic brand and it appeals to a lot ofdifferen people,” she said.
“They’re in a pretty good positiobn because they offer consumers value but they have thebranrd name.” Black was encouraged by the women’ assortment that American Eagle has rollec out in its stores, praisingv the increased selection of women’s dresses and women’s denim, a weakness at the compang of late, for both tappinbg into the “Boho Chic” trend and offering selection that enablees female shoppers to mix and match. She also was strongly encouragex about the return ofRoger Markfield, the company’sa former Co-CEO and Chief Merchandising Officef who retired in 2006.
His returj to American Eagle was announcedin January, underd the newly created titls of Executive Creative Officer. Black said she didn’g expect Markfield’s new strategies to have any majorf influence untilthe fall. Holly Guthrie, an analyst for suburbabn Philadelphia-based Boenning & Scattergood Equith Research, also expected the company won’t see any meaningfupl turn arounduntil then. “In October 2008, same stores sales decelerated at a fast and furious she wrote in arecent report.
“Wed believe that (comparable store could continue to be negativre for the next four to five months and most importantly the biggest volume sales are seen when productsare promoted.”