We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Factors to Decide American Eagle's (AEO) Fate in Q2 Earnings
Read MoreHide Full Article
American Eagle Outfitters, Inc. (AEO - Free Report) is expected to register robust top-line growth when it reports second-quarter fiscal 2022 results on Sep 7. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.2 billion, which indicates growth of 0.8% from the year-ago reported figure.
However, the Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 14 cents per share, suggesting a 76.7% decline from the year-ago quarter's reported number. The Zacks Consensus Estimate for the to-be-reported quarter's earnings has moved down 12.5% in the past 30 days.
We expect fiscal second-quarter total revenues to increase 2.4% year over year to $1,223.4 million and the bottom line to decline 74.9% to 15 cents per share.
The company reported a negative earnings surprise of 33.3% in the last reported quarter. However, it has a trailing four-quarter earnings surprise of 0.6%, on average.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle’s fiscal second-quarter results are likely to reflect the continued impacts of tough year-over-year comparisons, driven by the stimulus payments and pent-up customer demand in the year-ago quarter. High inflation rates, increased gas prices and stronger-than-expected demand for other discretionary categories are also expected to have marred the company’s fiscal second-quarter performance.
The company has been witnessing higher freight costs, and increased rent and delivery expenses, which have been denting the gross margin. Higher markdowns to clear the spring inventory, increased freight costs and the impacts of supply-chain acquisitions are expected to have weighed on the company’s gross margin in the to-be-reported quarter.
Increased SG&A expenses due to a rise in store wages and hours, as well as increased corporate compensation, professional services and advertising expenses, are likely to have impacted AEO’s operating margin in the fiscal second quarter.
On the last reported quarter’s earnings call, management expected continued freight inflation to dent margins throughout fiscal 2022. Moreover, it anticipated fiscal second-quarter SG&A to increase in the mid-single digits.
We expect second-quarter SG&A expenses, as a percentage of total revenues, to deleverage 60 basis points year over year to 25.2%. As a result, we anticipate an adjusted operating margin contraction of 970 basis points year over year to 4.4%.
However, management anticipated sales growth for second-quarter fiscal 2022 to be at similar levels as the first quarter.
Also, the company is on track with the Real Power, Real Growth value-creation plan. Its second-quarter fiscal 2022 performance is expected to have benefited from the significant progress on its Real Power Real Growth value creation plan. The plan has been driving profitability through real estate and inventory-optimization efforts, omni-channel and customer focus, and investments to improve the supply chain. The company’s efforts under the plan have been aiding the recovery of the American Eagle brand.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for American Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Eagle has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -4.93%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +24.88% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for CASY’s quarterly earnings moved up 14.1% to $3.32 per share in the past 30 days. The estimate suggests growth of 4.1% from the year-ago quarter’s reported number.
Casey's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.6 billion, which suggests a rise of 44.4% from the figure reported in the prior-year quarter. CASY has delivered an earnings beat of 5.8%, on average, in the trailing four quarters.
Dave & Buster's Entertainment (PLAY - Free Report) currently has an Earnings ESP of +2.97% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for PLAY’s quarterly earnings has moved down by a penny to $1.01 per share in the past seven days. The estimate suggests a 5.6% decline from the year-ago quarter’s reported number.
Dave & Buster's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $432.3 million, which suggests a rise of 14.5% from that reported in the prior-year quarter. PLAY has delivered an earnings beat of 41.1%, on average, in the trailing four quarters.
CarMax (KMX - Free Report) currently has an Earnings ESP of +1.59% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2023 earnings has moved up 2.1% to $1.47 per share in the past seven days, implying 14.5% growth from the year-ago quarter’s reported number.
However, CarMax’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.77 billion, which suggests a rise of 9.8% from the figure reported in the prior-year quarter. KMX has delivered a negative earnings surprise of 7.1%, on average, in the trailing four quarters.
Image: Bigstock
Factors to Decide American Eagle's (AEO) Fate in Q2 Earnings
American Eagle Outfitters, Inc. (AEO - Free Report) is expected to register robust top-line growth when it reports second-quarter fiscal 2022 results on Sep 7. The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $1.2 billion, which indicates growth of 0.8% from the year-ago reported figure.
However, the Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 14 cents per share, suggesting a 76.7% decline from the year-ago quarter's reported number. The Zacks Consensus Estimate for the to-be-reported quarter's earnings has moved down 12.5% in the past 30 days.
We expect fiscal second-quarter total revenues to increase 2.4% year over year to $1,223.4 million and the bottom line to decline 74.9% to 15 cents per share.
The company reported a negative earnings surprise of 33.3% in the last reported quarter. However, it has a trailing four-quarter earnings surprise of 0.6%, on average.
American Eagle Outfitters, Inc. Price and EPS Surprise
American Eagle Outfitters, Inc. price-eps-surprise | American Eagle Outfitters, Inc. Quote
Key Factors to Note
American Eagle’s fiscal second-quarter results are likely to reflect the continued impacts of tough year-over-year comparisons, driven by the stimulus payments and pent-up customer demand in the year-ago quarter. High inflation rates, increased gas prices and stronger-than-expected demand for other discretionary categories are also expected to have marred the company’s fiscal second-quarter performance.
The company has been witnessing higher freight costs, and increased rent and delivery expenses, which have been denting the gross margin. Higher markdowns to clear the spring inventory, increased freight costs and the impacts of supply-chain acquisitions are expected to have weighed on the company’s gross margin in the to-be-reported quarter.
Increased SG&A expenses due to a rise in store wages and hours, as well as increased corporate compensation, professional services and advertising expenses, are likely to have impacted AEO’s operating margin in the fiscal second quarter.
On the last reported quarter’s earnings call, management expected continued freight inflation to dent margins throughout fiscal 2022. Moreover, it anticipated fiscal second-quarter SG&A to increase in the mid-single digits.
We expect second-quarter SG&A expenses, as a percentage of total revenues, to deleverage 60 basis points year over year to 25.2%. As a result, we anticipate an adjusted operating margin contraction of 970 basis points year over year to 4.4%.
However, management anticipated sales growth for second-quarter fiscal 2022 to be at similar levels as the first quarter.
Also, the company is on track with the Real Power, Real Growth value-creation plan. Its second-quarter fiscal 2022 performance is expected to have benefited from the significant progress on its Real Power Real Growth value creation plan. The plan has been driving profitability through real estate and inventory-optimization efforts, omni-channel and customer focus, and investments to improve the supply chain. The company’s efforts under the plan have been aiding the recovery of the American Eagle brand.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for American Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
American Eagle has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -4.93%.
Stocks With Favorable Combination
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +24.88% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for CASY’s quarterly earnings moved up 14.1% to $3.32 per share in the past 30 days. The estimate suggests growth of 4.1% from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Casey's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $4.6 billion, which suggests a rise of 44.4% from the figure reported in the prior-year quarter. CASY has delivered an earnings beat of 5.8%, on average, in the trailing four quarters.
Dave & Buster's Entertainment (PLAY - Free Report) currently has an Earnings ESP of +2.97% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports second-quarter fiscal 2022 results. The Zacks Consensus Estimate for PLAY’s quarterly earnings has moved down by a penny to $1.01 per share in the past seven days. The estimate suggests a 5.6% decline from the year-ago quarter’s reported number.
Dave & Buster's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $432.3 million, which suggests a rise of 14.5% from that reported in the prior-year quarter. PLAY has delivered an earnings beat of 41.1%, on average, in the trailing four quarters.
CarMax (KMX - Free Report) currently has an Earnings ESP of +1.59% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2023 earnings has moved up 2.1% to $1.47 per share in the past seven days, implying 14.5% growth from the year-ago quarter’s reported number.
However, CarMax’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.77 billion, which suggests a rise of 9.8% from the figure reported in the prior-year quarter. KMX has delivered a negative earnings surprise of 7.1%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.