American Eagle keeps profit view, shares stumble

NEW YORK -- Shares of American Eagle Outfitters tumbled Tuesday, after the teen retailer's profit prediction for the current quarter disappointed investors.

THE SPARK: American Eagle Outfitters said it's on track to meet its previous fiscal third-quarter profit prediction of 37 cents or 38 cents per share. Analysts, on average, expect a profit of 39 cents per share for the period ending in October, according to FactSet.

At a conference for investors, the company also projected 2012 revenue of $3.44 million, ahead of average analysts' predictions of $3.41 billion.

THE BIG PICTURE: Higher demand for the chain's preppy clothing and accessories and fewer markdowns have helped lift revenue and earnings this year. Lower costs have also bolstered profitability.

THE ANALYSIS: Wells Fargo analyst Evren Kopelman said the drop in the company's stock price probably stemmed from investor disappointment that the company didn't raise its third-quarter guidance.

Still, Kopelman said that the company's sales growth and plans for new stores could produce better-than-expected results.

THE SHARES: Down $1.18, or 5.4 percent, to $20.87 in heavy afternoon trading. Over the past 52 weeks, the company's shares have ranged from $12.50 to $23.94. They're up about 37 percent this year.