American Eagle Outfitters Inc announced that earnings for the 13 weeks ended August 4, 2007 increased 19% to $0.37 per diluted share from $0.31 per diluted share for the 13 week period ended July 29, 2006.
“I am pleased that we achieved our 14th consecutive quarter of record sales and earnings. Our strong second quarter results reflected sound merchandise management and good expense control. We also made progress in the quarter toward our key goals of building brands for growth, optimizing our channels of distribution, and strengthening our operations for productivity improvements and continued profitable growth,” said Jim O'Donnell, Chief Executive Officer.
Second Quarter Results: Total sales for the 13 weeks ended August 4, 2007 increased 17% to $703.2 million, compared to $602.3 million for the 13 week period ended July 29, 2006. Due to the 53rd week in fiscal 2006, second quarter comparable store sales are compared to the 13 week period ended August 5, 2006. On this basis, the company delivered a comparable store sales increase of 2%.
Gross profit for the second quarter increased to $316.4 million from $275.3 million. However, as a percent to sales, gross profit declined to 45.0% from 45.7% last year. The merchandise margin declined 50 basis points as a result of higher markdowns, partially offset by a strong initial mark-up.
Buying, occupancy and warehousing costs increased 20 basis points as a percent to sales. This was drivenprimarily by rent expense relating to upcoming aerie store openings, as well as start-up costs associated with transitioning e-commerce fulfillment in-house.
Second quarter selling, general and administrative expenses of $166.4 million were flat as a percent to sales at a rate of 23.7%. Within SG&A, incentives and selling payroll leveraged, while expenditures related to in-store improvements and professional services increased as a percent to sales.
Operating income for the quarter increased 12% to $122.7 million from $109.3 million last year. As a percent to sales, operating income declined to 17.4%, compared to 18.2% last year.
marketing@alchempro.com
