Investors aren't buying American Eagle's excuses

The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.

By Motley Fool Investor Beat Mar 11, 2014 3:45PM
Shares of American Eagle Outfitters (AEO) fell Tuesday, after the company disappointed with its fourth-quarter earnings.

The company reported sales that were down 7 percent for the quarter, citing the harsh winter weather as a cause. But sales for the full year were also down by 5 percent, which gave investors cause for concern that there was more than just the cold weather at play here.

On Tuesday's installment of Stock of the Day, host Mark Reeth and Motley Fool analyst Taylor Muckerman discuss what else may have pulled the company down.
Taylor notes that other teen apparel retailers with a large presence in shopping malls, such as Abercrombie & Fitch (ANF) and Urban Outfitters (URBN), did not report the same weakness that American Eagle did, and says that American Eagle's CEO himself stated that the company did a poor job of attracting customers into their stores.

Further, Taylor isn't a fan of the company's target market to begin with. The 15- to 25-year-old demographic can be a difficult one since they often don't have their own money to spend. Taylor is far more interested in other retailers focusing on more high-end consumers now that the economy is in recovery.

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Tags: AEOANF
2Comments
Mar 11, 2014 3:55PM
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So American Eagle has crappy sales and blames the weather and Investors don't buy into it?  Well what about all the other companies that have had crappy sales and blame the weather and investors"shrug" off the news and the stock goes up.  Manipulation at it's finest!!
Mar 12, 2014 6:40AM
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I think the mere fact that bad weather would be blamed for any market condition should tell you the markets are failing and the bailing hasn't corrected the obvious. The obvious is-- extremely BAD management. Enterprise cannot be successfully run by paper and button pushing only. The weather will change, the cancer killing business, economy and America won't give up without a bullet to it's head. End the False Elite and restore free enterprise.

American Eagle Outfitters-- your core customer is destitute, made so by the job blockade you help keep intact. End the job blockade, destroy the alumni doing it or go out of business forever. It's not like the importer of cheap clothes that barely fit and won't outlast the 8th wash cycle aren't a dime a dozen. Get real for once, Wall Street.

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