Jefferies Remains Bullish as AUC Tailwinds Drive American Eagle Outfitters' (AEO) Strong 4Q
Jefferies reiterated a Buy rating and $24.00 price target on American Eagle Outfitters (NYSE: AEO) following the company's 4Q earnings report. AEO reported another solid quarter, with healthy comp gains, a flat GM, and slight SG&A leverage. AEO pointed to AUC tailwinds driving the majority of gross margin gains in FY'17, in part due to a favorable external sourcing environment. While benefiting the GM, this also allows AEO to reinvest in product quality and detailing.
Analyst Randal Konik commented, "AEO posted a solid quarter, and sees strength continuing into 1Q, supporting our view that spending share shifts are continuing toward non-durable goods. Further, AEO is benefiting from lower input costs, consistent with our thesis that the apparel space should benefit from margin tailwinds in FY'17. We see AEO as poised to continue to gain share and reiterate our Buy rating."
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Shares of American Eagle Outfitters closed at $15.44 yesterday.