QUOTE AND NEWS
Benzinga  Mar 2  Comment 
American Eagle Outfitters (NYSE: AEO) may offer a first-quarter outlook below Wall Street's expectations when it posts results Wednesday, according to an analyst. Shares of the teen apparel retailer changed hands recently at $14.84, off $0.14....
Benzinga  Mar 2  Comment 
Wunderlich maintains a PT of $11.00 and rating of Hold heading into Wednesday morning earnings report Latest Ratings for AEO Date Firm Action From To Feb 2015 BB&T Capital Initiates Coverage on Buy Feb 2015 Telsey...
Market Intelligence Center  Feb 25  Comment 
American Eagle Outfitters Inc (AEO) was identified by MarketIntelligenceCenter.com’s patented algorithms today after trading between $14.80 and $15.16 on Tuesday before closing at $14.98. A diagonal spread using a long position in the Jan. '16...
Market Intelligence Center  Feb 11  Comment 
American Eagle Outfitters Inc (AEO) traded between $14.66 and $15.05 before closing at $14.97 Tuesday and presents some attractive trading opportunities today according to MarketIntelligenceCenter.com's patented algorithms. The computer program...
Forbes  Jan 29  Comment 
American Eagle Outfitters released its holiday sales results earlier this month, reporting 1% increase in its revenues for the two month period of November and December. However, the company’s consolidated comparable store sales including...
Forbes  Jan 22  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
Benzinga  Jan 14  Comment 
In a recent report by Wunderlich Securities, analysts reiterated their Hold rating on American Eagle Outfitters (NYSE: AEO) and set a $11.00 target for the stock. After a generally upbeat day of presentations at the 2015 ICR XChange Conference,...
Benzinga  Jan 9  Comment 
In a report published Friday, CRT Capital Group analyst Lee J. Giordano reiterated a Fair Value rating on American Eagle Outfitters (NYSE: AEO), and raised the price target from $13.00 to $15.00. In the report, CRT Capital Group noted, “We are...
TheStreet.com  Jan 9  Comment 
NEW YORK (TheStreet) -- RATINGS CHANGES AbbVie was downgraded at Bank of America/Merrill Lynch to neutral. Valuation call, based on a 12-month price target of $70, Bank of America/Merrill Lynch said. American Eagle was upgraded at Telsey...
Benzinga  Jan 8  Comment 
American Eagle Outfitters' (NYSE: AEO) holiday sales were slightly higher than expected but an analyst sees "no real momentum" in the company's business. Wunderlich's Eric Beder maintained a Hold rating and $11 target, saying the stock remains...




 

American Eagle (NYSE: AEO) is a mall-based apparel and accessories retailer that sells its own brands of products throughout the U.S. and Canada. AEO operates two different chains (American Eagle Outfitters and aerie) that target 15 - 25 year old customers. Its original third operation (Martin + OSA) was shut down in FY2010.[1] The overwhelming majority of AEO's sales come from its namesake American Eagle operations.

In order to enter new markets, AEO has also entered into a partnership with an international retail operator to open stores in the Middle East. This decision has the added benefit of reducing the effects of U.S. economic cycles on AEO's bottom line. However, recent rising commodity prices have negatively affected AEO's costs.

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Company Overview

American Eagle sells its own brands of clothing and accessories in mall-based retail stores in the U.S. and Canada. AEO currently sells clothing under two brand names: its American Eagle flagship store (which targets 15 - 25 year old men and women) and its Aerie stores (which sells intimates and personal care products to 15 - 25 year old women).

Business Segments

  • Men's apparel and accessories - 40% of 2010 net sales
  • Women's apparel and accessories (excluding aerie) - 51% of 2010 net sales
  • aerie - 9% of 2010 net sales

[1]

Company Growth

Fiscal 2010 (ended on January 29, 2011)

Competition

AEO competes with several other retailers in the 14-30 year old apparel market. AEO has consistently been at the top of its sector in terms of profitability and is one of the largest companies in the market in terms of net sales. AEO's 21.0%[3] operating margin is the highest out of all of its competitors, even considering that its 48.0% gross margin rate is considerably lower than the 66.6% gross margin rate of AEO's main competitor, ANF.

Competitors include:

  • Abercrombie & Fitch Company (ANF): ANF is a larger company than AEO, with a greater store base and higher net sales than AEO. Abercrombie & Fitch Company (ANF) also operates three brands: Abercrombie & Fitch, Hollister, and abercrombie; all of which target different subsets of the 8 - 30 age range. While AEO's namesake stores compete directly with A&F and Hollister stores, AEO has no match for A&F's kids apparel concept: abercrombie. Although ANF is one of AEO's most direct competitors, the two company's operate with different strategies: Abercrombie maintains a premium brand with high price points while American Eagle attempts to reach a larger range of customers with relatively lower price points on trendy products.
  • Aeropostale (ARO): ARO is a smaller company than AEO, with the overwhelming majority of revenue coming from only its namesake brand of stores that targets 14 - 17 year olds. Aeropostale's business model also relies heavily on sales and promotions, something that AEO is trying to move away from in order to keep margins high.
  • Pacific Sunwear of California (PSUN): Pacific Sunwear primarily serves several different customer segments through its three retail chains: PacSun, demo, and One Thousand Steps. PacSun stores are based mostly around trends in the alternative sports (surfing, snowboarding, skateboarding, etc.) lifestyle and offer third-party branded as well as private label apparel, footwear and accessories to teenagers and young adults.[4] Finally, demo stores target 16 to 24 year olds with fashion and accessories influenced by hip-hop lifestyle and One Thousand Steps offer a wide range of casual footwear to the 18 to 24 year old customer segment.[5]
  • Urban Outfitters (URBN): Urban Outfitters is a relatively young retailer that operates three different branded store chains, Urban Outfitters (18 to 30 year olds), Anthropologie (30 to 45 year old women), and Free People (16 to 35 year old women).[6] Urban Outfitters is not as directly comparable to AEO due to its slight differentiation in targeted customer segments.
  • Gap (GPS): Gap is a much larger company than AEO in terms of sales, stores and customer segments targeted. Through variations on Gap (Gap Kids, babyGap, Gap Maternity) the retailer serves a wide range of customers; also, Banana Republic and Old Navy stores serve different socio-economic segments.[7] Because of the wider range of customers, Gap doesn't match up with AEO as closely as some other competitors, however there is considerable overlap.

[8] [9] [10] [11] [12] [13]

References

  1. 1.0 1.1 AEO 2009 10k
  2. http://phx.corporate-ir.net/phoenix.zhtml?c=81256&p=irol-newsArticle&ID=1537511&highlight=
  3. Pacific Sunwear of California (PSUN) Corporate Website
  4. Pacific Sunwear of California (PSUN) Corporate Website
  5. Urban Outfitters (URBN) Corporate Website
  6. Gap (GPS) Annual Report 2006
  7. Abercrombie and Fitch Annual Report 2009
  8. Urban Outfitter Annual Report 2009
  9. Pacific Sun Annual Report 2009
  10. Aeropostale Annual Report 2009
  11. American Eagle Outfitters Annual Report 2009
  12. Gap Annual Report 2009
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