You are using an older browser version. Please use a supported version for the best MSN experience.

Why American Eagle Outfitters' Stock Is Rising Today

The Motley Fool logo The Motley Fool 1/11/2022 John Rosevear

What happened

Shares of American Eagle Outfitters (NYSE: AEO) were moving higher on Tuesday morning after the company said that it will hit its fiscal 2023 financial targets two years ahead of schedule.

As of 10:30 a.m. ET, American Eagle's shares were up about 2.2% from Monday's closing price.

So what

In a press release issued before the U.S. markets opened on Tuesday, American Eagle Outfitters said that after "strong holiday sales," it expects to report at least $600 million in operating income for fiscal 2021, with an operating margin of at least 10%. 

The company had previously said that it hoped to generate $550 million in operating income, with a 10% margin, in 2023.

AEO's new © American Eagle Outfitters AEO's new

"Operational excellence drove solid results amid external disruptions," CEO Jay Schottenstein said in a statement. "We closed out a milestone year for our supply chain, anchored by two key acquisitions, which secured cost efficiencies, locked in key strategic advantages and created a new platform for future growth."

Schottenstein also said that while the company's newer Aerie brand contributed considerable growth, its once-struggling American Eagle brand is now steadily profitable. 


Video: Bank of America slashing overdraft fees (ABC News)

Having hit its 2023 goals two years early, American Eagle has set new ones. The company is now aiming to generate $800 million in operating income in fiscal 2023, with an operating profit margin of 13.5%.

All of that is welcome news, and it's why the stock is up today. 

Now what

American Eagle Outfitters also gave retail investors some more detail on what to expect when it reports its fiscal fourth-quarter earnings, likely in early March. 

For the fourth quarter of its fiscal 2021, which will end on Jan. 31, American Eagle now expects revenue to be up from a year ago by a percentage in the "mid-to-high-teens," and up from the fourth quarter of fiscal 2019 by a percentage in the "mid-teens." 

Operating income for the quarter will be between $90 million and $100 million, notwithstanding an $80 million increase in transportation costs due to COVID-19-related supply chain disruptions, the company said.

SPONSORED:

10 stocks we like better than American Eagle Outfitters

When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and American Eagle Outfitters wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of January 10, 2022

 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

AdChoices
AdChoices
AdChoices

More from The Motley Fool

The Motley Fool
The Motley Fool
image beaconimage beaconimage beacon