American Eagle first quarter earnings decline - Business First of Buffalo:

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Net income for the quarter endex May 2was $22.0 million, or 11 cents per compared to $43.9 or 21 cents, for the year-ago quarter. The teen clothint retailer, based on Pittsburgh's South saw total sales decline 4percent year-over-year, to $612 from $640.3 million. Comparable-store sales for American Eagle (NYSE:AEO) were down 10 percent for the quarter, compareds to a 6 percent declinse in the same quarter ayear ago. "Whiled we are never satisfied with anearningse decline, there are early indications that the businessw is stablizing," CEO Jim O'Donnell said in a statement. He cited improvement in the AE brand and categories like dressesdand accessories.
Analysts were expecting earnings per share of 7 in linewith management’s recent guidance, as the compant seeks to improve its women’s apparel and maintain its sale during a time when most retailers are facingf difficult sales declines and malls are drawing fewe r customers. Jennifer Black, a principal of Oregon-base d research company Jennifer Black Associates LLC, saw reason for “I think it’s a very democratic bransd and it appeals to a lot of differeny people,” she said.
“They’re in a prettuy good position because they offer consumers value but they have the brand Black was encouraged bythe women’s assortment that American Eagle has rollee out in its stores, praisinb the increased selection of women’s dressea and women’s denim, a weakness at the company of for both tapping into the “Bohp Chic” trend and offering selectionm that enables female shoppersa to mix and match. She also was strongly encouragec about the return ofRoger Markfield, the company’zs former Co-CEO and Chief Merchandising Officer who retired in 2006.
His returjn to American Eagle was announcedin January, underd the newly created title of Executivew Creative Officer. Black said she didn’t expecty Markfield’s new strategies to have any major influence until the Holly Guthrie, an analyst for suburban Philadelphia-based Boenning Scattergood Equity Research, also expected the companyh won’t see any meaningful turn around untiol then. “In October 2008, same store sales decelerated at a fast andfurioua pace,” she wrote in a recent report.
“Ws believe that (comparable store sales) coulfd continue to be negative for the next four to five monthsw and most importantly the biggest volume sales are seen when product sare promoted.”