American Eagle Outfitters (NYSE:AEO) has rallied about 12% this year, outperforming the S&P 500's 10% gain and the Dow Jones U.S. Retail Index's anemic 3% growth. That robust performance is unusual, since competition from fast fashion leaders Zara and H&M, aggressive markdowns, over-extended brick-and-mortar footprints, and clumsy e-commerce efforts hurt many retailers this year.

Guess crashed 30%, Abercrombie & Fitch plunged over 45%, and Aeropostale filed for bankruptcy. Yet American Eagle is still going strong, posting positive year-over-year sales growth for eight consecutive quarters. Let's examine American Eagle's four biggest growth opportunities to see why this trend is likely to continue.

1. Aerie

American Eagle's fastest growing brand is Aerie, its lingerie and activewear brand targeting 15 to 25 year-old females. Aerie generated lots of buzz with its bralettes and body-positive ad campaigns, which featured models of all shapes and sizes. That move made it the antithesis of segment leader Victoria's Secret.

Image source: Aerie.

Aerie only controls a low single-digit share of the lingerie market, but it's rapidly growing. Comps rose more than 20% for six consecutive quarters, compared to the namesake brand's single-digit growth. Victoria's Secret, by comparison, posted just 1% comps growth last quarter. Aerie has only opened 97 stand-alone Aerie locations so far (out of 1,052 systemwide stores) and plans to add another 25 locations next year -- indicating that the brand has plenty of room to grow.

2. Todd Snyder and Tailgate

Aerie's growth complements the company's overall popularity with female shoppers. Demand for women's tops boosted the female segment to "mid single digits" comps growth last quarter. However, weakness in menswear offset that growth, with total comps rising just 0.4%. AE has been taking steps to address that weakness. Last year, it acquired menswear retailer Todd Snyder for $11 million, which includes its high-end namesake brand and the Tailgate collegiate apparel brand.

AE will expand Todd Snyder into affluent urban areas, with the first step being a new flagship store in New York. Only three Tailgate stores have been opened so far, but the company intends to add three more locations next year. As AE scales up Tailgate across college towns over the next few years, the brand could become a new pillar of growth alongside Aerie.

3. Denim

In Piper Jaffray's biannual "Taking Stock with Teens" report, teen shoppers who come from households with average annual incomes of $109,000 are becoming more interested in jeans -- 19.5% of the teens surveyed were interested in jeans again, compared to 14.1% this spring and just 13.7% a year ago. That represents its highest level in six years.

American Eagle was ranked the top denim brand among upper income female shoppers, indicating that AE might be stealing market share from leading denim names like Levi Strauss, OTB's Diesel, and VF Corp's Wrangler. During last quarter's conference call, AE Brand President Chad Kessler declared that AE will leverage its "market-leading jeans and bottoms business to build a global reputation for great fits, quality, value, and innovation."

4. Fashionable athletic wear

Piper's survey also found that "leggings and Lululemon" remained the top fashion trends among upper income teenage girls. To tap into that market, Aerie launched a new yoga-inspired "Chill. Play. Move" line of sports bras and leggings.

Image source: Aerie.

Aerie Brand President Jen Foyle stated that the line "exceeded" sales expectations last quarter. While the brand isn't positioned as a direct competitor to Lululemon or Gap's Athleta, it allows AE to yet again leverage its strength among female shoppers to diversify into a growing adjacent market.

The key takeaway

Even after outperforming the broader market this year, American Eagle's trailing price-to-earnings of 14 times remains much lower than the industry average of 24 for apparel retailers. Its 2.8% dividend yield also bests the 2.1% average for the broad S&P 500. Analysts expect the company's outperformance to continue with 3% sales growth and 15% earnings growth next year.

Based on these opportunities, I plan to continue holding my position in American Eagle, which I started back in June. The coming year might be a bit volatile due to tougher year-over-year comparisons, but I believe AE's positive reputation among teens and shrewdly positioned brands will keep it ahead of the competition.