Shares of American Eagle Outfitters (NYSE:AEO) fell today after the company disappointed on its fourth-quarter earnings. The retailer reported sales that were down 7% for the quarter, citing the harsh winter weather as a cause, but sales for the full year were also down by 5%, which gave investors cause for concern that there was more than just the weather at play here.
On Tuesday's installment of Stock of the Day, host Mark Reeth and Motley Fool analyst Taylor Muckerman discuss what else may have pulled the company down. Taylor notes that other teen apparel retailers with a large presence in shopping malls, like Abercrombie & Fitch and Urban Outfitters, did not report the same weakness that American Eagle did, and says that American Eagle's CEO himself stated that the company did a poor job of attracting customers into its stores.
Furthermore, Taylor isn't a fan of the company's target market to begin with. The 15-to-25-year-old demographic can be a difficult one, since these customers often don't have their own money to spend. Taylor is far more interested in other retailers focusing on more high-end consumers now that the economy is in recovery.
Now, here are two retailers dominating where others flounder.
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Mark Reeth and Taylor Muckerman have no position in any stocks mentioned. The Motley Fool recommends Urban Outfitters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.