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American Eagle's profits double

US young fashion chain American Eagle recorded flat like-for-like sales for the second quarter with its net income doubling in a year. 

For the three months to July 30, total sales increased 4% to $676m (£413m) compared to $652m (£398m) last year.

Net income rose to $19.7m (£12.0m), up from $9.7m (£5.9m) last year. However, its profits fell short of projections causing its shares to tumble.

Gross profit was $232m (£142m) compared to $240m (£147m) in the same period last year. Operating income for the quarter was $29m (£18m), compared to $38m (£23m) last year.

Like for like sales at its stores were flat for the quarter, however for the first half comparable sales dropped by 4%.

Sales at the company’s direct-to-consumer business, which includes websites ae.com, aerie.com and 77kids.com, increased by 16%. The retailer said this was due to higher transactions driven by improved traffic and conversion.

Jim O’Donnell, chief executive officer, said: “During the quarter, we achieved improved performance on the top line and EPS within our range of expectations. We managed our business prudently and made significant strides on our longer-term initiatives which are laying the foundation for future growth. Importantly, a renewed focus on our key item businesses and improved merchandising are delivering positive results, with the back-to-school season off to an encouraging start.”

Earlier on this year it was reported that the retailer had hired a property agent to find stores in the UK and debut in the UK in London with plans to open up to 100 stores in the country.

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