(Teen retail report card updated with Pacific Sunwear of California and American Eagle Outfitters earnings results.)
NEW YORK ( TheStreet) -- Teen retailers were in the spotlight this week, as investors looked to second-quarter earnings reports to shed light on the all-important back-to-school season.
The market, however, was disappointed with the sector, as outlooks for the second-half of the year were muted -- with deep discounting across the board and rising sourcing and labor costs expected to weigh on teen retailers' margins for the remainder of the year.
"It is becoming glaringly obvious to us that the short-sighted inventory buying binge and subsequent 'planned' deep discounting of Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO), in the face of one of the most economically affected sectors in the economy, has managed to destroy any potential for even the better-run teen players, who maintained inventory and expense discipline, to register strong results," Brean Murray analyst Eric Beder, wrote in a note.
Retail Growth Stocks
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