Commodities: At American Eagle, Costs Outpace Sales Growth — Market Talk

8:48 ET – American Eagle Outfitters reported higher-than-expected comparable sales in the most recent quarter, signaling positive momentum ahead of the critical holiday season. However, while total sales grew 2.1%, costs of sales rose by 4% and contracting gross margin caused adjusted EPS to come up a penny short of expectations. The company said increased promotional activity and higher shipping costs associated with a shift toward online shopping hurt caused gross margin to fall to 39% from 40.2%. Shares rise 6.2% to $17.19 during premarket trading, extending the 6.2% gain logged so far this year. ([email protected]; @moisenoise)

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