What happened
Shares of apparel retailer American Eagle (AEO -2.38%) took a hit on Wednesday, falling about 14% as of 11:30 a.m. EDT.
The stock's decline follows the company's fiscal second-quarter results, which were released before market open on Wednesday. Investors were likely disappointed by American Eagle's comparable sales growth rate, as the key metric came in below what analysts were looking for.
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So what
American Eagle reported total revenue of $1.04 billion, up 8% year over year. Non-GAAP (adjusted) earnings per share for the specialty retailer were $0.39. Both of these metrics were higher than consensus analyst estimates for revenue and non-GAAP EPS of $1 billion and $0.32, respectively.
Comparable sales growth of 2%, however, was below analysts' expectations and marked a significant deceleration from comparable sales growth of 6% in the company's fiscal first quarter.
"We faced challenges largely stemming from underperformance in certain seasonal categories and a delayed start to back-to-school," said American Eagle CEO Jay Schottenstein in the company's second-quarter earnings release. But the CEO noted that it saw strong momentum in AE jeans, Aerie, and its digital channel during the quarter.
Now what
Schottenstein provided an upbeat take on the current quarter, saying, "The AE team has taken quick action to strengthen the business and we are pleased to see an improvement in third quarter-to-date sales." He added, "Our brands remain strong and we are well-positioned to continue to grow and gain market share."
For its fiscal third quarter, management expects comparable sales to rise in the low- to mid-single digits.
