Executive Summary

• American Eagle Outfitters reported 3Q18 revenues of $1.004 billion, up 4.5% year over year and just shy of the $1.02 billion consensus estimate. EPS was $0.48, in line with the consensus estimate and up significantly from $0.36 in the year-ago quarter.
• Comparable sales were up for the 15th consecutive quarter, at 8.0%, but missed the consensus estimate of 8.8%. American Eagle comps rose by 5%, compared with the consensus estimate of 6%, and Aerie comps rose by 32%, beating the consensus estimate of 28.5%.
• The company lowered its 4Q18 EPS guidance to $0.40–$0.42 from $0.45–$0.47 previously, based on expected comp growth in the mid-single digits and total revenue growth in the low single digits, versus consensus of $0.47. The company also lowered its fourth-quarter comp and revenue projections, and now expects mid-single-digit comp growth and low-single-digit total revenue growth.