American Eagle Outfitters in 2015: clear winner of teen apparel retailers

Despite the struggles witnessed across all the teen apparel retailers across the United States, analysts agree on one clear winner within the niche: American Eagle Outfitters. While Trefis highlights the impressive turnaround the company has achieved towards the end of the year, ‘Seeking Alpha’ crowns the retailer as the clear winner within this sub-sector.

It is worth of remembering that American Eagle Outfitters (NYSE:AEO) started the year 2015 struggling to find its place in the U.S. apparel market. However, the retailer has managed to close 2015 with a golden brooch, significantly improving its merchandise portfolio, customer response and comparable sales growth.

Thanks to consistent efforts through the year, “American Eagle finally managed“ to improve

With consistent efforts to revamp its offerings throughout the year, American Eagle finally managed to get its portfolio in-line with customer preferences, which was evident from its third-quarter results. It even made significant progress on the omni-channel front and expanded its reach into new international markets, thus lowering its operational risk while growing its overall revenue opportunity. In addition, the retailer acquired a small clothing company, in order to diversify its product portfolio and improve its competitive position against fast-fashion giants. Below, we take a look at key developments for American Eagle through the year,” writes Trefis in an analysis for its customers.

In terms of key moves made by the retailer that have contributed to the improvement of the company’s balance sheet in the second half of the year, analysts at Trefis highlight the brand’s international expansion, its bid for e-commerce and the recent acquisition of Tailgate brand. The latter was closed in a cash and stock deal worth 11 million dollars.

“We believe that these additions will reap benefits for the retailer in the medium to long run, by adding a new revenue stream and providing a diversified portfolio that can draw customers’ attention towards American Eagle stores and away from Zara and Forever 21. Our price estimate for the company at 17 dollars, is more than 5 percent ahead of the current market price,” concludes Trefis.

In a similar note, ‘Seeking Alpha’ is confident in AEO’s potential. “American Eagle is a sound investment moving forward after Q3 figures and forward guidance,” the online financial news and analysis portal publishes.

 

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