American Eagle Outfitters Inc. (Pittsburgh, Pa.) reported missed sales and profit plans as fiscal second-quarter earnings declined 66 percent on wider losses related to its failed Martin + Osa chain. For the quarter ended July 31, the retailer had a profit of $9.7 million, down from $28.6 million last year. Total sales grew 0.8 percent to $652 million while same-store sales declined 1 percent after a 10 percent drop for the same quarter in 2009.
“Given the inconsistencies in business trends and unpredictable consumer behavior, we have intensified our actions to improve efficiencies, streamline our process and strengthen profitability,” says ceo Jim O'Donnell, reports The Wall Street Journal.
Those plans include closing 50 to 100 stores in the next two to five years, as well as staff reductions.
AEO, which operates 934 stores, is closing its unprofitable Martin + Osa chain, while ramping up expansion plans for its new 77kids brand, which began online and move to bricks-and-mortar this year.