American Eagle continues its strong run

This could be a turnaround year for the teen specialty retailer.

By Trefis Mar 27, 2012 11:42AM
Image: Teens with MP3 player (© RubberBall/SuperStock)Teen apparel retailer American Eagle Outfitters (AEO) has continued its strong run after reporting solid fourth-quarter results, with the stock touching a 52-week high last Monday. 

In addition to a strong line-up for the spring quarter and good acceptance in key categories, including denim, wovens, tees and shorts, American Eagle's newly appointed CEO, Robert Hanson, is finding he's popular among investors, too.

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).

American Eagle Outfitters Stock Breakup
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.

1Comment
Mar 27, 2012 3:05PM
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Since no one has commented i might as well say it. Who gives a ****
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