American Eagle Outfitters, Inc. (AEO) Stock | Acquires Tailgate Clothing Company, Boosts Q3 Expectations


American Eagle Outfitters, Inc.  (NASDAQ: AEO)


American Eagle Outfitters, Inc. (AEO), a retailer of apparel and accessories company yesterday announced  they are acquiring Tailgate Clothing Company. The purchase price was approximately $11 million. AEO  also raised their third quarter EPS guidance to $0.34 up from expected range of $0.28 – $0.31, up 55% from previous year.


American Eagle Outfitters, Inc. CEO Comments

“We are thrilled to add these unique brands to our portfolio, which provide exciting new business opportunities,” said Jay Schottenstein, Interim CEO. “Todd and Jimmy bring exceptional creative talent and operational skills. They will continue to lead the business, as our organization remains focused on driving continued momentum and profit improvement. Capital investments in the Tailgate and Todd Snyder brands will be paced, with a test and scale approach based on profitability and return on investment.”  Business Wire

Comments regarding Third Quarter Update :

“In a highly challenging retail environment, we are extremely pleased to see our AE and Aerie brand customers respond positively to product and quality enhancements. We continue to experience greater full-priced selling and less promotional activity, resulting in profit margin expansion,” said Jay Schottenstein. “As we look ahead, we are optimistic about the upcoming holiday season and will continue executing customer-focused initiatives while delivering returns to shareholders.”

AEO Technical Analysis


AEO gapped up in price yesterday to $16.59, up from the prior day’s close of $15.26, which is a 9% increase on the favorable news. Taking a look at the daily chart, we can see the last time AEO traded above this price level was on September 8th, when it closed at $16.98.  Taking a further look back on the chart we can see AEO has been trending down since its 52 week high price of $18.49 on August 18th. However, with this gap up in price, AEO has broke the trend of putting in lower highs. The last high was on October 9th and was $16.19 which should now be the support level for AEO on this move up. AEO has a float of 179 million shares and is trading over 1.5 times the normal daily trading volume. AEO did reach pre market highs of $16.75, but it gave back $0.16 at the open, or equivalent to 1%. For trading purposes, my entry point would have been $16.75 looking for a run through $17. My stop loss would have been $16.60 fearing anything below that and the stock would start to fill in the gap up.


Company Profile

American Eagle Outfitters, Inc. operates as a retailer of apparel and accessories in the United States and internationally. The company’s stores offers denims, pants, shorts, sweaters, fleece, outerwear, graphic T-shirts, footwear, and accessories for 15 to 25 year old men and women under the American Eagle Outfitters brand name; and intimates and personal care products for women the aerie brand name. As of January 31, 2015, it operated 955 American Eagle Outfitters stores and 101 aerie stand-alone stores. The company also sells its products through its e-commerce Websites and American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.  Yahoo Finance