For the first quarter of 2019, American Eagle Outfitters’ (NYSE: AEO) results were benefited by the continued leverage of strong brand equity, compelling product, and leading customer engagement across its American Eagle and Aerie stores and digital. The results exceeded analysts’ expectations. However, the company guided second-quarter earnings below the consensus estimates.

Net income rose by 2% to $40.75 million and earnings increased by 5% to $0.23 per share. Adjusted earnings inched up by 4% to $0.24 per share. Total revenue increased by 8% to $886.29 million.

Comparable sales increased 6% following a 9% growth in the previous year quarter. By brand, American Eagle comparable sales increased 4%, building on a 4% increase last year. Aerie’s comparable sales grew 14%, following a 38% jump last year and marking the 18th consecutive quarter of double-digit comps growth.

American Eagle Outfitters (AEO) first quarter 2019 earnings snapshot

Looking ahead into the second quarter the company expects earnings in the range of about $0.30 to $0.32 per share, based on an anticipated comparable sales increase in the low single digits. This guidance excludes potential asset impairment and restructuring charges. During the previous year quarter, the company reported earnings of $0.34 per share.

For fiscal 2019, the company still predicts capital expenditures to be in the range of $200 million to $215 million, with more than half related to store remodeling projects and new openings, and the balance to support the digital business, omnichannel tools and general corporate maintenance.

During the first quarter, the company opened 7 American Eagle stores and closed 5, ending with 936 American Eagle stores, including 151 Aerie side-by-side locations. Additionally, the company opened 4 Aerie stand-alone stores, ending with 119 Aerie stand-alone stores. Internationally, the company ended the quarter with 235 licensed stores compared to 217 last year.

Also read: Wingstop flys to 4-year high after a rating change

For the first quarter, the American Eagle’s ongoing market share gains are led by its dominant jeans business, and Aerie’s consistent double-digit growth has been fueled by the brand’s strong appeal to both existing and new customers. Looking ahead, the company sees a significant runway for each of its brands.

For fiscal 2019, the company expects to open 15 to 20 American Eagle branded stores and 35 to 40 Aerie stand-alone stores, while predicting to close 10 to 15 American Eagle branded stores and 5 to 10 Aerie stand-alone stores during the year. The total consolidated stores at the end of fiscal 2019 are projected to be 1,080 to 1,100, with 40 to 50 stores are likely to be remodeled and refurbished.

Shares of American Eagle Outfitters ended Tuesday’s regular session up 3.35% at $18.52 on the NYSE. Following the earnings release, the stock inched up over 7% in the premarket session.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.