American Eagle Outfitters, Inc. (AEO) stock was performing low today following the release of second-quarter 2021 financial results. AEO stock saw a decline of 9.38% to drop at $27.30 a share at the time of this writing. The stock was also gloomy in the previous trading session and went low by 1.54% at closing. Let’s deep dive to explore more of it.
Second Quarter 2021 Financial Results:
AEO stock generated $1.19 billion in the second quarter of 2021 representing 35% revenue growth compared to the prior-year same period. Aerie revenue was $336 million while American Eagle revenue was $846 million in the reported quarter. Consolidated store revenue increased73% while digital revenue dropped by 5% as compared to the same tenure of the previous year.
Gross profit significantly increased from $265 million in Q2,2020 to $502 million in Q2,2021, 89% year-over-year growth. The gross margin jumped from 30% in the second quarter of 2021 to 42.1% in the second quarter of 2021.
AEO stock reported an operating income of $168 million as compared to a $12 million operating loss in the prior-year same period. Aerie’s operating income was jumped from $30 million in Q2,2020 to $71 million in Q1, 2021. American Eagle’s operating income increased by 234% to reach $199 million in the reported quarter.
The operating margin for the AEO stock was 14.1%, the highest since 2008. Aerie’s operating margin was 21.0% and American Eagle’s operating margin was 23.5%.
Inventory and Capital Expenditures of AEO stock:
AEO stock’s total consolidated ending inventory at cost improved by 20% or $82 million to reach $504 million in Q2,2021. Inventory was 21% decreased in the same tenure of the previous year. American Eagle recorded $49 million in capital expenditures by the end of the second quarter of 2021. The stock recorded $86 million year-to-date capital expenditures.
Cash Flow and Balance Sheet of AEO stock:
By the end of the second quarter of 2021, AEO stock had $824 million in cash and short-term investments. The cash and short-term investments were $899 by the end of the second quarter of 2020.
Conclusion:
It seems that investors are not happy with the second quarter of 2021 financial results of AEO stock. The revenue for the stock showed a record increase but came up shy of forecasts. In a nutshell, long-term investors should keep an eye on this stock.
