It’s buy-one-get-one-free time, and not just in the aisles of American Eagle Outfitters (NYSE:AEO) stores. The consumer-unfriendly economy has driven the retailer to feature BOGO 50% off jeans and T-shirt specials on its website right now. Yep, instead of full-price back-to-school gear, it’s all about bargains for this once high-flying teen retailer. And shoppers aren’t the only ones getting a deal. Investors can swipe the stock at a price that’s less than half of its 52-week high.

American Eagle’s second-quarter earnings were as tattered as those $49.50 Super Bleach Destroyed Wash jeans the company is featuring. It’s hard to say which is worse: the 22% EPS decline for the quarter, or the disclosure that August month-to-date same-store sales are already down 6%. With that kind of performance start, it’s no surprise American Eagle adjusted third-quarter earnings guidance, forecasting an earnings-per-share decline of up to 31% for the next quarter.

Inventory fell 8% on a per-square-foot basis, but not without consequences. The gross margin lost 300 basis points, and operating profits plummeted to 13% of sales, down from 17.4% last year. One bright spot is the 21% increase in online sales with increased traffic and conversion rates, a trend I noted not too long ago. The company also continues to expand with new AE, aerie, and Martin + Osa stores.

Months ago, we examined teen retail trends and identified an emerging “bookend” effect, with teens purchasing low-end or high-end items at the expense of mid-range retailers like AE and Abercrombie & Fitch (NYSE:ANF). This has continued through the summer, with Aeropostale (NYSE:ARO) delivering a 13% same-store sales jump and The Buckle (NYSE:BKE) posting a 20.9% comps increase in July. Higher-end retailer Urban Outfitters (NASDAQ:URBN) also generated a 13% increase in same-store sales for the quarter ending July 30.

With these stats in mind, I can see how American Eagle would look to boost its position through price competition. Right now, Aeropostale has that market cornered and is offering its own jeans sales to spark back-to-school bargain shopping. The fear is that American Eagle has typically competed on product strength rather than price. Can AE reposition itself as a price player (and, more importantly, does it want to)?

AE expects to spend about $125 million in store remodels and new locations this year, and it’s not entirely clear if this investment reflects the company’s higher-priced clothing line or a temporary, lower-price mentality. Changing strategies may be necessary with a market downturn, but getting the word out to teens and parents that American Eagle Outfitters is now price-competitive may be a tough proposition, especially considering the company’s brand expansion in higher-end kids’ shops. In either case, I don’t think these BOGO stock prices are a bargain that investors are looking to extend for the long term.

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American Eagle Outfitters is a Motley Fool Stock Advisor selection, and the Fool owns shares. Looking for more advice in a topsy-turvy market? Give the Motley Fool’s newsletters a try via the 30-day free trial.

Fool contributor Colleen Paulson does not own stock in any of the companies mentioned in this article. The Fool’s disclosure policy is always sporting the newest trends.