How Can American Eagle Outfitters Improve Profitability?
While on the surface a company that's posting record revenue seems like it must be doing well, it's always wise to dig deeper and see how management is actually accomplishing that feat.
In the case of American Eagle Outfitters (NYSE: AEO), the 2019 fourth quarter improved 6% year over year to $1.31 billion. That's a significant increase, especially considering the so-called demise of retail apparel shops and malls.
However, profitability deteriorated, with earnings per share coming in at $0.03 versus $0.43 for the same time last year, a whopping decrease. Gross profit declined 5% and gross margin was 31% versus 34.6% last year.
Source Fool.com
