Photo: Stephen Chernin / AP
Since CEO Robert Hansen took over American Eagle last year, sales and profits have soared. American Eagle is the analyst favourite in teen retail, with earnings per share up a stunning 37 per cent from a year earlier. Meanwhile, Abercrombie is just stabilizing and Aeropostale is struggling.
The reason American Eagle is doing so well is because they’re doing one thing better than anyone else in the business, according to Dorothy Lakner, an analyst at Caris & Co.
It comes down to merchandise assortment.
“American Eagle will deliver a strong holiday based on greater merchandise differentiation versus other teen retailers,” Lakner said. “It’s my favourite name in the teen sector.”
American Eagle has the perfect mix of fashionable, trendy pieces and core basics. While Abercrombie and Aeropostale stick to the preppy style they’ve always had, American Eagle makes an effort to offer trend-right apparel and accessories.
The merchandise difference is apparent on American Eagle’s website. It advertises trendy pieces like sequined sweaters and tie-dyed jeans alongside plain denim and button-down shirts.
The brand’s “well-balanced core and fashion lifestyle assortment resulted in an increase in traffic,” said Eric Beder, an analyst at Brean Capital.
In retail, the best merchants win. For now, American Eagle is offering the best assortments to the teen audience.
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