JWN Nordstrom Inc

American Eagle Outfitters Inc. said its profit jumped during the holiday quarter, boosted by higher sales that came despite unfavorable weather and more cautious consumer spending.

Chief Executive Jay Schottenstein, who was named permanent CEO in December after being credited with a "swift recovery" at the apparel retailer, called the fourth quarter a challenging one for the apparel industry. Retailers from Macy's Inc. and Nordstrom Inc. to Wal-Mart Stores reported disappointing fourth-quarter results, hurt by warm weather that crimped demand for cold-weather gear, aggressive discounting and a more discerning consumer.

But American Eagle managed to post sales gains and reported earnings that came in at the high-end of its guidance. Moreover, the retailer signaled momentum would continue and offered upbeat guidance for the current quarter.

Teen retailers like American Eagle and rival Abercrombie & Fitch Co. have faced tough competition from fast-fashion players like Forever 21 and H&M that offer the latest styles at lower prices. But American Eagle has made progress this year in improving its merchandise and controlling its inventory levels. In its latest quarter, the retailer said sales at stores open at least a year rose a better-than-expected 4% after coming in flat a year earlier. Total merchandise inventory, meanwhile, grew 9% to $305 million, an increase American Eagle said matched its expectation and resulted largely from earlier receipts versus the year earlier quarter, when inventories were hit by slowdowns at West Coast ports.

Earlier Wednesday, Abercrombie & Fitch similarly reported improved results, logging its first same-store sales gain in more than three years as its quarterly earnings soared 33%

For the three months ended Jan. 31, American Eagle posted a profit of $81.7 million, or 42 cents a share, up from $61.6 million, or 32 cents a share, a year earlier. Revenue rose 3.2% to $1.11 billion.

The company had projected adjusted earnings of 40 cents to 42 cents a share. Analysts were looking for revenue of $1.11 billion, according to Thomson Reuters.

For the current quarter, American Eagle expects to earn an adjusted 17 cents to 19 cents a share, above the 15 cents analysts have predicted.

Shares in the company rose 1.4% to $15.63 in recent after-hours trading, a gain that would erase the stock's year-to-date decline if it were to open near that level Thursday.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

March 02, 2016 17:25 ET (22:25 GMT)

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