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Financial Roundup: American Eagle Flutters, Dick’s Takes a Hit, TJX Rolls Along and Urban Outfitters Dips

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American Eagle saw mixed results in the first quarter, while Wall Street punishes Dick’s Sporting Goods, TJX keeps rolling and Urban Outfitters struggles with its sales.

American Eagle Outfitters

Sales were up but profits were down for American Eagle Outfitters Inc.’s first quarter ended April 29.

The company reported Wednesday that gross profit decreased 5 percent to $278 million from $293 million last year, with a gross margin rate of 36.5% to revenue compared to 39.2% last year. The company said the margin declined primarily due to increased promotional activity and higher shipping costs related to a strong digital business.

Total net revenue increased 2 percent to $762 million from $749 million last year. Consolidated comparable sales were up 2 percent, following a 6 percent increase last year.

Operating income fell 37 percent to $37 million, which includes $5 million of restructuring charges, compared to $59 million last year.

“The first quarter results reflected mall traffic headwinds, especially early in the quarter, with improved trends over Easter and a strong digital business throughout,” chief executive officer Jay Schottenstein said. “As we look ahead, we are taking the right steps to improve our results and adjust our business for today’s rapidly evolving retail environment. We are creating efficiencies across our organization, as we aim to continue capitalizing on the strength of our brands, product leadership and other competitive advantages.”

The company said it plans to open 35 American Eagle Outfitters and Aerie stores throughout the U.S., Canada and Mexico. Management plans to close between 25 and 40 store locations in 2017. Internationally, the company plans to open 45 licensed stores and close two licensed locations.

Dick’s Sporting Goods

Dick’s Sporting Goods Inc.’s stock took a hit on Tuesday after it reported consolidated net income for the first quarter ended April 29 was below expectations.

Dick’s said net income for the three months was $58.2 million, or 52 cents per diluted share, compared to the company’s expectations provided on March 7 of 48 cents to 53 cents per diluted share. For the year-ago quarter, Dick’s had consolidated net income of $56.9 million, or 50 cents per diluted share.

On Tuesday, Dick’s stock fell nearly 14 percent to close at $41.04 on the New York Stock exchange. It bounced back a bit on Wednesday, with the stock up about 2 percent at midday trading.

Net sales for the quarter increased 9.9% to about $1.8 billion. Consolidated same store sales increased 2.4% compared to the company’s guidance of 3 percent to 4 percent increase. First quarter consolidated same store sales increased 0.5%.

“Despite a challenging retail environment, we realized growth across each of our three primary categories of hardlines, apparel and footwear, and were pleased with the performance of our newly relaunched e-commerce site,” said chairman and CEO Edward W. Stack. “We remain optimistic as we drive profitable growth on our new e-commerce platform, make marked progress on our new merchandising strategy and continue to capture market share.”

At quarter’s end, the company operated 691 Dick’s Sporting Goods stores, 98 Golf Galaxy stores and 29 Field & Stream stores.

Despite consolidation in the sporting goods sector, the company said it expects to open about 43 Dick’s stores in 2017, along with some eight Golf Galaxy stores and eight Field & Stream stores adjacent to new or relocated Dick’s units. These openings include former Sports Authority Golfsmith stores that the company plans to convert to Dick’s Sporting Goods and Golf Galaxy stores, respectively.

TJX Companies

The TJX Companies Inc. posted a bump in sales and earnings in the first quarter ended April 29, with a solid outlook for the second quarter.

The off-price apparel and home fashions retailer reported net sales for the quarter increased 3 percent to $7.8 billion. Net income for the first quarter rose 5.5% to $536 million from $508 million, and diluted earnings per share were 82 cents versus the prior year’s 76 cents.

Ernie Herrman, CEO and president of The TJX Companies, said, “With our disciplined inventory management, our merchandise margin was up, which speaks to the resiliency and flexibility of our off-price retail model. Further, we are confident that we are gaining market share at each of our four major divisions. The second quarter is off to a solid start and we have excellent liquidity in our inventories.”

For the second quarter, the company expects diluted earnings per share to be in the range of 81 cents to 83 cents compared to 84 cents last year.

As of April 29,the company operated 3,862 stores in nine countries under the T.J. Maxx, Marshalls, HomeGoods, Sierra Trading Post, Winners and HomeSense banners.

Urban Outfitters

Urban Outfitters Inc., which operates Anthropologie, BHLDN, Free People, Terrain and Urban Outfitters brands, saw a precipitous decline in sales and earnings in the first quarter ended April 30.

Net income decreased 60 percent to $11.9 million, or 10 cents a share, from $29.6 million, or 25 cents, a year earlier. Sales for the three months fell 0.2% to $761.2 million from $762.6 million.

“During the first quarter, we continued to see strong double-digit growth from our direct-to-consumer channel and our wholesale business,” said CEO Richard A. Hayne. “We believe we have significant opportunity to continue to grow both of these channels at all of our brands.”

During the three months, the company opened seven locations, including four Free People stores, one Urban Outfitters unit, one Anthropologie Group site and a Food and Beverage restaurant; and closed four locations.

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