BMO Says American Eagle Is 'On Trend'

BMO Capital provided its analysis on American Eagle Outfitters AEO on Thursday, keeping the firm's conservative outlook steady.

The analysts believe the competitive pricing strategies from other companies, such as Abercrombie & Fitch Co. ANF, caused Eagle to increase its markdown rate in later June.

Referring to the BMO Merchant team, the analysts stated the company is on-trend with natural, organic styles and high volume of "mix & match" products to choose from.

Related Link: Abercrombie & Fitch Product Offerings Too Bland, Says BMO

According to BBD (BMO Big Data), the company increased the number of markdown SKUs right after noticing a promotional activity from Abercrombie & Fitch, Express, Inc. EXPR and Urban Outfitters, Inc. URBN this quarter. "In conjunction with this, we note promotions such as '25–50 percent off shorts' (vs. BOGO 50 percent of select shorts last year) and 'BOGO 50 percent off tees/tanks' (vs. no tees/tanks sale last year)," wrote BMO.