AEO

American Eagle Outfitters Inc

Consumer


Presented:06/19/2018
Price:$23.52
Cap:$4.19B
Current Price:$21.06
Cap:$4.04B

Presented

Date06/19/2018
Price$23.52
Market Cap$4.19B
Ent Value$3.28B
P/E Ratio19.28x
Book Value$6.85
Div Yield2.12%
Shares O/S178.27M
Ave Daily Vol4,208,406
Short Int9.14%

Current

Price$21.06
Market Cap$4.04B
American Eagle Outfitters, Inc. is a multi-brand specialty retailer. It offers an assortment of apparel and accessories for men and women under the American Eagle Outfitters brand, and intimates, apparel and personal care products for women under the Aerie brand. The company operates stores in the United States, Canada, Mexico, Hong Kong, China and the United Kingdom. It also acquired two emerging brands to complement its existing brands, Tailgate, a vintage sports-inspired apparel brand, and Todd Snyder New York, a premium menswear brand. The company was founded in 1977 and is headquartered in Pittsburgh, PA.

Publicly traded companies mentioned herein: American Eagle Outfitters Inc (AEO)

Highlights

The presenter is short shares of American Eagle Outfitters (AEO), seeing some early indicators of weakness despite outwardly strong fundamentals. He cites meaningful insider selling, signs of margin deterioration, and building inventory levels as potential “red flags.” The risk/reward set-up is attractive at current levels, since AEO still must reckon with secular declines in mall traffic and rising customer acquisition costs. He believes AEO shares have ~30% downside in ~2 – 3 quarters’ time, assuming 10% - 15% downside to Street estimates and the P/E multiple compressing down to 13x, from 16x – 17x today.

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Idea Discussion

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