American Eagle Gives Longtime Interim CEO the Job for Goodby
American Eagle Outfitters Inc. tapped interim Chief Executive Officer Jay Schottenstein to lead the company permanently, resolving one of the longest-standing CEO searches in the apparel industry.
The board has appointed Schottenstein to the role effective immediately, Pittsburgh-based American Eagle said in a statement Wednesday. The executive, who has served as the company’s chairman since 1992, had been temporary CEO since January 2014.
The move marks Schottenstein’s second stint as CEO -- he led the company from 1992 to 2002 -- and settles a prominent question for investors. As interim leader, he has restored sales growth to the company and helped American Eagle outperform many peers in the beleaguered teen-apparel market.
“Jay has orchestrated a swift recovery since taking the helm, successfully guiding the company through a challenging and highly competitive retail environment,” Michael Jesselson, the board’s lead independent director, said in the statement.
Schottenstein updated the retailer’s merchandise to capitalize on the festival-chic trend and drew teens back to the store with the resurgence of denim. The company also has reduced its reliance on discounts and continues to expand its selection, even as competitors cite challenges with slowing foot traffic in malls. Last month, American Eagle announced the purchase of designer Todd Snyder’s Tailgate Clothing Co., which makes vintage-inspired collegiate sportswear, as well as his high-end menswear line, for $11 million in cash and stock.
The shares rose as much as 5.4 percent to $16.66 in extended trading after the news was announced. The stock had gained 14 percent this year through the close of trading.
In a separate statement, the company said earnings amounted to 35 cents a share last quarter, which ended Oct. 31. That exceeded its earlier forecast of 34 cents. Sales were $919.1 million, missing the average analyst estimate of $928.2 million.
American Eagle expects profit in the current quarter of 40 cents to 42 cents a share. Analysts have estimated 41 cents a share on average, according to data compiled by Bloomberg. The retailer predicts that comparable sales will grow by the mid-single digits in the period, compared with a 3.9 percent gain estimated by Consensus Metrix.