MKM Partners Discusses September Same-Store-Sales (AEO)

MKM Partners discusses September same-store-sales (SSS), saying there could be some disappointments in September, as expectations ran high. It discusses American Eagle Outfitters AEO, which it rates at Neutral, with a $14 price target. In the research report, MKM writes, "We think September back-to-school (BTS) shopping across retail started strong, but finished weaker, which is in line with expectations, given the trend of shopping closer to need and higher sales concentration around peak periods. However, expectations have risen this month to a greater degree than we think is warranted, as we saw some market share shifts within our coverage as the month progressed. Specifically, we think Aeropostale started on the same weak trend it had in August, but finished stronger than its peers. On the other hand, we believe Abercrombie & Fitch saw a modest drop-off in its share gains at the beginning of the month that deteriorated as September progressed. We believe American Eagle continued to lead with traffic and conversion for most of the month, as we had expected. However, consensus appears to be looking for AEO to post a moderate acceleration in sales trends in September from August on a two- and three-year basis, which we view as unlikely." Shares of American Eagle gained 5 cents yesterday to close at $14.96, a gain of 0.34%.