Benzinga | Nov 23, 2020 10:21AM EST

American Eagle Outfitters's Earnings: A Preview

On Tuesday, November 24, American Eagle Outfitters (NYSE: AEO) will release its latest earnings report. Here is Benzinga's outlook for the company.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

American Eagle Outfitters EPS will likely be near $0.34 while revenue will be around $1.03 billion, according to analysts. American Eagle Outfitters earnings in the same period a year ago was $0.48 per share. Quarterly sales came in at $1.07 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The Wall Street estimate would represent a 29.17% decline in the company's earnings. Revenue would be down 3.38% from the same quarter last year. American Eagle Outfitters's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate -0.16 -0.22 0.36 0.48EPS Actual -0.03 -0.84 0.37 0.48Revenue Estimate 847.79 M 656.75 M 1.27 B 1.06 BRevenue Actual 883.51 M 551.69 M 1.31 B 1.07 B

Stock Performance

Over the last 52-week period, shares are up 18.89%. Given that these returns are generally positive, long-term shareholders can relax going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. American Eagle Outfitters is scheduled to hold the call at 16:15:00 ET and can be accessed here.