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PITTSBURGH-American Eagle Outfitters Inc. had good news to report in its third quarter conference call, with both a slight earnings increase and comp store sales boost. The 912-store clothing chain hasn’t seen a drop into the negative, as some retailers have in a tough economy, and executives said 2008 will be the year the company will open its 1,000th location.

The company said its earnings for the third quarter increased by 2% to 45 cents per diluted share, from 44 cents per share for Q3 2006. Total sales increased 7% to $744.4 million from third quarter last year, and comp store sales increased 2%, one of the few retailers to show positive comp store sales in the third quarter.

“Even though sales were below our original plan, the results reflected the benefits from operating improvements, expense management and technologies,” said Jim O’Donnell, CEO. “We navigated well through a challenging quarter and proved that our disciplines are in place to drive consistent sales. Importantly, we also identified a number of opportunities for 2008.”

Forty-six new stores were opened in the third quarter, and a total of 80 new stores will be open in 2007, said Joan Hilson, EVP and CFO, during the call. The company also will have remodeled 53 stores in 2007. Total spending on these new and refurbished stores will be at about $125 million by the end of the year, she said.

Next year will see another 10% boost in store sf growth, she said. The company expects to open 135 new stores and will remodel another 50 stores, Hilson said. The breakdown will be about 70 of the chain’s Aerie brand stores, 45 to 50 of the American Eagle stores and 15 Martin + Osa stores. The remodeled stores will be the American Eagle brand.

O’Donnell hinted that another new brand, Concept 4, will make a strong showing for the company in the future, but not in 2008. He did say that the company looks to make headway into the international market; currently, the firm only has 75 American Eagle stores outside the US and Puerto Rico. O’Donnell said the move will not be made lightly. “We are looking more toward a joint venture with a partner or partners, depending on the destination country,” he said during the call. “We’ve had a number of conversations with specific people who have al real and genuine interest. I’ll probably have more to say by the early part of next year. We think we can participate in the international arena, but I am also being somewhat cautious.”

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