American Eagle Outfitters (NYSE:AEO) announced fiscal year-end and fourth quarter reports for 2014 and showed solid growth. The company had very positive results while its main rival, Abercrombie & Fitch, is still reeling from theirs. Revenue for the 2014 fiscal period came in at $1.07 billion which is a slight 3% increase over the previous 2013 period. For the period, the company showed a profit of 63 cents per share which was a reduction of 15% from the previous year, but after the way 2014 started it was considered a great save. The company was able to raise margins despite the tough selling environment and the gross profit came in at $376 million.
A key stat for retail, rate to revenue, raised 320 basis points showing the company was prudent with their discounts and markdowns. The fourth quarter was the big positive for the company as despite deep discounts being offered by the industry, American Eagle Outfitters (NYSE:AEO) was still able to turn a solid profit. The year started off slow as a long and unusually strong winter season hampered sales well into March of 2014. The management was able to utilize improved merchandise assortments and creating a better customer experience to garner sales from the tough environment.
In the fourth quarter of fiscal 2014 the company showed an operating income of $112 million and expanded the margins to 10.5% as a rate of revenue, which is strong for a retailer. They recorded an EPS of 63 cents which was a reduction from the same period last year but a solid recover when all things are told. The company also had to face an after-tax charge of $8.5 million as third party vendors failed to meet lease obligations and the company was left holding the bag.
The stock is on fire and is trading at its 52-week high. There is a lot of momentum and it should consolidate here before making any other moves.
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