Yahoo Finance Will American Eagle Continue to Soar on Growth Strategies? - Analyst Blog
American Eagle Outfitters, Inc. AEO has been on a roll, backed by its strategic growth initiatives, digital capacities, solid brand portfolio and impressive earnings history.
As part of its strategic initiatives, American Eagle plans to focus on strengthening its product assortments by adding more compelling brands, managing inventory levels diligently and improving eCommerce business. Moreover, it remains committed toward enhancing store sales by rationalizing its brick and mortar store fleet. This includes closing underperforming stores and expanding the profitable ones. Alongside, the company is focused on global expansion.
Moreover, American Eagle is striving to develop its omni-channel platform to reach customers in every possible way. In this regard, the company is trying to make improvements to its website as well as mobile app. While American Eagle is gaining from its pilot programs like “buy online, ship from store” that have resulted in incremental sales and efficient use of inventory, it hopes to launch the “reserve online” facility soon.
Together, these factors present the company with significant opportunity to expand its business and cater to the incredible global demand for its products.
Further, American Eagle is continuously undertaking initiatives to reduce costs through supply chain efficiencies and its updated product allocation system in order to boost its bottom line.
In the last reported quarter, the company delivered robust results as its top and bottom lines surpassed the Zacks Consensus Estimate and improved year over year. The company’s superior merchandise collection and enhanced customer experience boosted sales while lower promotions ensured earnings growth. The strong first quarter also encouraged management to issue a favorable outlook for the second quarter, leading to an uptrend in estimates.
Apart from the first quarter, American Eagle has been performing well for a long time now. The company has delivered an average positive earnings surprise of 14.1% over the past three quarters.
We believe that this Zacks Rank #2 (Buy) stock has been gaining significant momentum from all the aforementioned factors, which helped it hit a 52-week high of $18.29 yesterday. Moreover, American Eagle has witnessed a 35% upsurge in share price year to date.
Other Stocks to Consider
Other well-ranked stocks in the same industry that warrant a look include Express Inc. EXPR, with a Zacks Rank #1 (Strong Buy), Citi Trends, Inc. CTRN and Foot Locker, Inc. FL, each carrying a Zacks Rank #2.
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AMER EAGLE OUTF (AEO): Free Stock Analysis Report
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