American Eagle Outfitters reported EPS of $0.42 for the fourth quarter ended January 30, 2016.
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This is a 17% increase from EPS from continuing operations of $0.36 for the comparable quarter last year.
Q4 total net revenue increased 3% to $1.11 billion from $1.07 billion last year. Consolidated comparable sales increased 4%, compared to flat comparable sales last year.
American Eagle Outfitters gross profit increased 3% to $388 million and the gross margin rate remained flat to last year at 35.1% of revenue. A slight improvement in markdowns, favorable product costs and lower rent expense were offset by higher incentive costs. Delivery costs related to a strong direct business also increased.
Selling, general and administrative expense of $233 million increased 3% from $227 million last year.
The increase in dollars was primarily the result of higher incentive costs and planned investments in digital marketing, which were offset by a one-time gain on the sale of the previously closed Warrendale, PA distribution center. As a rate to revenue, SG&A leveraged 10 basis points to 21.1%.
Operating income increased 3% to $116 million from $112 million last year, and the operating margin remained flat to last year at 10.5% as a rate to revenue.
The tax rate was 27.9% in the quarter as the result of income tax settlements, higher federal tax credits, and tax strategies. EPS of $0.42 increased 17% from EPS from continuing operations of $0.36 last year.
Fiscal year 2015 results
The following discussion is based on Non-GAAP results. Total net revenue increased 7% to $3.52 billion from $3.28 billion last year. Consolidated comparable sales increased 7%, compared to a 5% decrease last year.
Gross profit increased 13% to $1.3 billion and leveraged 180 basis points to 37.0% as a rate to revenue. The improvement in the gross margin was primarily due to lower markdowns and rent leverage, partially offset by higher incentive costs.
Selling, general and administrative expense of $835 million increased 3%, and leveraged 90 basis points to 23.7% as a rate to revenue. Savings that resulted from expense reduction initiatives offset higher incentive costs related to strong sales and margin performance.
Operating income increased 55% to $320 million. The operating margin increased 280 basis points to 9.1%. EPS from continuing operations of $1.09 increased 73% from adjusted EPS from continuing operations of $0.63 last year. ■