11:06 AM EST, 03/07/2024 (MT Newswires) -- American Eagle Outfitters ( AEO ) reported stronger-than-expected gains in fiscal fourth-quarter results Thursday while guiding for low-single-digit yearly revenue growth and setting a path toward maintaining that expansionary pace over the next three years.

Revenue rose to $1.68 billion for the three months ended Feb. 3 from $1.5 billion the year earlier, topping the $1.67 billion average analyst estimate on Capital IQ. Adjusted earnings per share were $0.61, up from $0.37 a year earlier and above the Street's $0.50 view. Shares of American Eagle climbed 5.6% in morning trade.

By segment, American Eagle revenue increased 11% on 6% comparable sales growth to reach $1.07 billion during the quarter, while Aerie's revenue jumped 16% on 13% comparable sales growth to $537.5 million. Adjusted gross margin advanced 340 basis points to 37.3%.

"I am proud of how the teams executed in the fourth quarter," Chief Executive Jay Schottenstein said in a statement. "As our profit improvement initiatives took hold, we delivered a material improvement in business, underscoring the power of our brands, operations and strategic focus."

For 2024, the retailer expects operating income in the range of $445 million to $465 million, compared with GAAP operating income of $222.7 million in fiscal 2023. It sees revenue rising 2% to 4% from 2023's revenue of $5.26 billion, which includes a one-point headwind from one less selling week. The consensus on Capital IQ is for revenue of $5.39 billion in the ongoing year.

In part reflecting easier comparisons in the first half of the year, American Eagle expects revenue and profit growth to be skewed to the first half of the year. For the first quarter, management expects operating income in the $65 million to $70 million range on mid-single-digit revenue growth.

"We are entering 2024 with momentum and from a position of strength with an exciting line-up of innovation and customer engagement initiatives," Schottenstein said. "Our balance sheet is healthy and we are seeing early proof points of our new long-term strategy to deliver industry-leading earnings growth and shareholder returns."

Separately on Thursday, American Eagle unveiled a new profitable growth plan to deliver 3% to 5% annual revenue growth over the next three years, establishing a "clear path" to achieving $5.7 billion to $6 billion on the top line. It also expects to deliver mid-to-high teens annual operating income expansion and an operating margin of about 10%.

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