Teen apparel retailers American Eagle Outfitters (NYSE:AEO) and Urban Outfitters (NASDAQ:URBN) are both making the news today after being beaten up on the market, with both stocks near 52-week lows. While Urban Outfitters did see some pretty good Q4 results from its Anthropologie business at least, American Eagle's earnings report was awful, with profits down a staggering 89% from the same quarter last year.
In this segment from Tuesday's Investor Beat, host Chris Hill and Motley Fool analysts Morgan Housel and Mike Olsen look at the extremely difficult business of teen apparel. Not only is the customer base notoriously fickle, but Mike also notes that they are a very underemployed demographic at the moment, even while the broader economy recovers. Those two factors together make this an exceptionally difficult consumer base to appeal to, though Mike also looks at one advantage Urban Outfitters may have over the competition.