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How Has American Eagle Outfitters Stock Moved since Q1 2018?

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Stock price moves north

On June 1, American Eagle Outfitters (AEO) stock rose ~1.6% after its announcement of better-than-expected first-quarter results on May 31. On a YoY basis, its revenues and EPS jumped 8.0% and 43.8%, respectively.

American Eagle Outfitters’ (AEO) Aerie brand is expected to reach $1.0 billion in revenues in the near term. Also, its management is confident that the American Eagle brand could add another $1.0 billion as sales of bottoms gain traction along with improvement in loyalty membership. Its American Eagle brand reported $3.0 billion in revenues last year.

Apparel retailers’ strategic efforts, including the focus on digital, revamping merchandise assortment, and improving operational efficiency, have yielded the company’s desired results. In addition to American Eagle Outfitters, Abercrombie & Fitch and Urban Outfitters have also reported better-than-expected top- and bottom-line numbers for the fiscal first quarter. This has led to improvement in the stock price movement of these companies.

On June 1, American Eagle Outfitters stock had risen 20.0% year-to-date. In comparison, Abercrombie & Fitch (ANF) and Urban Outfitters (URBN) had risen 24.9% and 22.1%, respectively. However, Gap (GPS) had fallen 15.0% on a year-to-date basis. Gap missed the bottom-line expectations for the fiscal first quarter, sending the stock price down. The performance of the company’s Gap brand continues to struggle.

Valuation overview

On June 1, American Eagle Outfitters was trading at a 12-month forward PE ratio of 15.1x. Since its fiscal first-quarter results, which were released on May 31, its valuation multiple has increased 0.9%. American Eagle Outfitters was trading at a lower valuation multiple than Abercrombie & Fitch and Urban Outfitters, which were trading at 22.1x and 17.1x, respectively. On the other hand, Gap was trading at ~11.2x, lower than American Eagle Outfitters.

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