American Eagle continues its strong run
This could be a turnaround year for the teen specialty retailer.
Considering American Eagle's better inventory management, lower markdowns and strong sales in this quarter, we believe 2012 could be a turnaround year for the company. American Eagle competes with other teen specialty retailers such as Abercrombie & Fitch (ANF), Aeropostale (ARO) and Gap Inc. (GPS).
2012 -- a potential turnaround year for American Eagle Outfitters
This year has started on a positive note for American Eagle Outfitters. While a 35% reduction in inventories was the primary catalyst behind the growth after Q4 FY11 earnings, solid sales in February and good traction in key apparel categories have carried forward this positive momentum.
Additionally, the new CEO Robert Hanson is also living up to market expectations. Hanson has been instrumental in American Eagle's successful spring endeavors, and the market expects this trend to continue.
We also anticipate the company will begin to benefit from declining cotton prices starting this quarter, which should improve American Eagle's margins, going ahead.
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Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
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