American Eagle (AEO) earnings Q4 2023

American Eagle on Thursday announced a new strategy to boost profitable growth over the next three years, as the retailer said it wrote off $94 million in impairment charges related to its internal logistics business Quiet Platform.

The company also reported holiday earnings that beat Wall Street’s expectations thanks to strong demand and lower markdowns and input costs. 

Shares closed 2% lower Thursday.

Here’s how American Eagle did in its fourth fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: 61 cents adjusted vs. 50 cents expected
  • Revenue: $1.68 billion vs. $1.67 billion expected

The company’s reported net income for the three-month period that ended Feb. 3 was $6.32 million, or 3 cents per share, compared with $54.6 million, or 28 cents per share, a year earlier. Excluding one-time items, American Eagle posted adjusted earnings of 61 cents per share. 

Sales rose to $1.68 billion, up about 12% from $1.5 billion a year earlier. 

In the current quarter, American Eagle expects sales to be up by a mid-single digit percentage, which is in line with estimates of up 5%, according to LSEG. For the full year, it expects sales to be up 2% to 4%, the higher end of which would beat the 2.9% analysts had expected, according to LSEG. 

During the Covid pandemic, American Eagle spent hundreds of millions of dollars acquiring a number of shipping and distribution companies that eventually became Quiet Platforms, the retailer’s internal logistics branch. It was designed to streamline American Eagle’s own shipping needs, but the company also sought to “Uber-ize” the global supply chain by serving as a logistics platform for other companies. 

Last spring, American Eagle acknowledged that Quiet Platforms wasn’t performing as it had expected. The segment’s president and chief operating officer had left the company as the retailer worked to restructure the business, RetailDive reported.

During the fourth quarter, American Eagle took $98.3 million in impairment and restructuring charges related to Quiet Platforms, the bulk of which were impairments to its goodwill, intangible assets and technology that are no longer a part of the platform’s long-term strategy. Employee severance costs made up $4.3 million in charges.

While the investments may no longer be worth what they once were at the time the company made them, finance chief Mike Mathias told CNBC the platform has

Read more