Stocks of pharmaceutical-company Allergan (AGN) and apparel-retailer American Eagle Outfitters (AEO 0.91%) are trading lower after market close on Wednesday. Allergan shared disappointing news about one of its drugs in development, and American Eagle's first-quarter guidance was underwhelming, despite a strong fourth quarter.
Here's a closer look at both of these stories.
American Eagle Outfitters
Apparel-retailer American Eagle Outfitters posted notable fourth-quarter results, but may have let some investors down when it came to its first-quarter earnings-per-share (EPS) guidance.
Revenue rose 1% year over year to a record $1.24 billion, even though there was one less week than in the year-ago quarter. Revenue would have been about $60 million higher in the quarter if the period had an additional week, management said. Comparable sales increased 6% year over year -- on top of an 8% increase in the year-ago quarter.
Management expects comparable-sales growth to slow in Q1, rising at a percentage rate in the low single digits. In addition, American Eagle guided for first-quarter EPS between $0.19 and $0.21. Analysts, on average, were expecting first-quarter EPS of $0.24.
"Strong execution by the teams drove a record fourth quarter and fiscal 2018, as we reached a milestone of $4 billion in annual revenue with increased operating profit," said American Eagle CEO Jay Schottenstein in the company's fourth-quarter earnings release. "American Eagle and Aerie continued to deliver consistent performance by combining product innovation and great merchandise with an improved customer experience across channels."
Looking to 2019, management says the company's strong balance sheet and free cash flow allows it to "make important investments in our business to fuel market share gains, future growth and returns to our shareholders."
Shares of American Eagle were down about 3.1% in after-hours trading as of 5:50 p.m. EST.
Also after market close on Wednesday, Dublin-based pharmaceutical leader Allergan announced disappointing results from phase 3 results for its rapastinel drug, which was aimed to be an adjunctive treatment of Major Depressive Disorder (MDD). The rapastinel treatment failed three acute studies as part of phase 3 adjunctive MDD trials.
"We are deeply disappointed with these results, and they are a vivid reminder that drug development is extremely challenging, especially in mental health," said Allergan's chief of research and development David Nicholson in the company's press release on Wednesday.
The stock was down 3.5% in after-hours trading as of 5:50 p.m. EST.