Earnings Preview: American Eagle Outfitters

American Eagle (AEO) is expected to report Q2 earnings before market open Tuesday, Aug. 26, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for a profit of 28c on revenue of $709.05M. The consensus range is 28c to 30c for EPS, and revenue of $689.M to $770M, according to First Call.

Analyst Views

The company recently reported July Same Store Sales were down 7% verses a consensus of down 2.5%. On August 7, the company gave Q2 EPS guidance of 28c vs. a prior view of 28c to 30c. Positive drivers for this quarter include an expansion of the women's accessories and intimate apparel categories and a strong trend in brand-right merchandise. On the negative side is the slowdown in consumer spending and specifically for American Eagle, the recent weakness in girls' denim.

On July 16, Stephens recommended buying the shares. The firm said that investors should buy the stock now as they expect American Eagle's back-to-school line to be a catalyst for sales. The firm views shares as undervalued and maintains an Overweight rating. On July 29 Goldman Sachs initiated the stock with a Sell rating.