American Eagle Outfitters Inc. will be reducing its footprint after its quarterly figures were severely cut down. The teen retailing chain said Wednesday it plans to close down 150 North American stores over the next three years.
Additionally, the retailer will be keeping a close eye on the performance of another 300 stores that have leases expiring over the period.
Margins at the group were reduced by 35 percent in the first quarter of their present fiscal year. Meanwhile, profit plunged 86 percent to 3.9 million dollars for the period ending May 3, while comparable same-store sales dropped 10 percent. Revenue also fell, by 5 percent to 646 million dollars.
After releasing the quarterly update, American Eagle Outfitters shares dropped 7 percent to 10.54 dollars apiece, implying a 26 percent drop in value so far this year.
In neighbouring Canada, Sears' latest earnings showed that the department stores operator is still struggling to re-kindle the loyalty of its customers. Its shares dipped 10 cents to close at 15.21 dollars on the Toronto Stock Exchange.
It posted losses of 75.2 million dollars, or 74 cents per share, for the three-month period ended May 3, duplicating the losses on a year-on-year basis (a year ago, loss was of 31.2 million dollars, or 31 cents per share, for the same period).
The company blamed the poor results on cold weather that dragged sales on in its spring merchandise for several weeks.
Neither good news in terms of earnings for Cato, which shares fell 6.7 percent Wednesday after it reported first-quarter fiscal 2014 earnings of 1.04 dollars per share, which tripped 1 percent year-over-year. Quarterly earnings, however, were in line with the Zacks Consensus Estimate, as analysts at Zacks highlighted in a report.
“Earnings per share received a push of nearly 2 cents from the company's share buy-back program during the quarter,” stressed Zacks analysis team.
Sales for the quarter improved 5.7 percent year-over-year to 282.5 million dollars while comparable-store sales (comps) climbed 3 percent. Gross profit for the reported quarter increased 7.1 percent to 118.1 million dollars and gross margin expanded 50 basis points (bps) to 41.8 percent. The year-over-year rise is mainly attributable to improved merchandise contribution.
In the UK, PriceWaterhouseCoopers (PwC) administrators for Internaçionale have decided to close 26 stores more in an attempt to solve some of the financial struggles of the retailer. 300 redundancies will come with these closures.
PwC was appointed to Internaçionale at the end of February. It then closed eight shops out of the 89-store estate in March. In this regard, PwC joint administrator and partner Bruce Cartwright: “As stated at the time of appointment, without an interested buyer for the business or store portfolio, it was inevitable that redundancies and store closures would be necessary as the administration process continues.