American Eagle Outfitters To Report Lukewarm Results?

Shares of American Eagle Outfitters (NYSE: AEO) fell almost 2.5 percent on Tuesday in anticipation of the announcement of the company’s fiscal first quarter 2016 on Wednesday, after the market close.

According to Estimize, both the Street and the crowd expect to see earnings sextuple year-over-year; from $0.02 per share reported in the first quarter of last year, to $0.12 expected for this quarter.

Although earnings are expected to rise substantially, revenues are expected to come in quite flat, around $689 million, compared to $646.1 in the same quarter last year.

It should be noted, however, that the estimates imply a steep fall from last quarter’s $0.36 per share.

Another thing to observe in the chart above is American Eagle Outfitters’ history of actual earnings versus estimates: the company has been able to either meet or beat consensus in most of the latest quarters.

The second graph here illustrates the evolution of sentiment over time. While the crowd weighed in only last week, the Street has become increasingly bullish as earnings got closer.

Why You Shouldn’t Expect A ‘Blowout' Quarter

B. Riley analysts commented on American Eagle Outfitters ahead of earnings.

According to a recent Benzinga article, the firm noted that “the inherent port and traffic headwinds that were seen across the entire apparel space will prevent American Eagle from reporting ‘blowout’ metrics.”

However, the analysts are expecting the company to report a better quarter than the one registered a year ago, on the back of “improved merchandise assortment and less aggressive discounting and promotions.”