This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Back to School Apparel Trends Your Teen Is Craving

NEW YORK (TheStreet) -- Former go-to teen apparel destinations Aeropostale (ARO - Get Report) , Abercrombie & Fitch (ANF - Get Report) , Urban Outfitters (URBN - Get Report)   and American Eagle Outfitters (AEO - Get Report) are financially reeling as fast-fashion purveyors Forever 21 and H&M open new stores and deliver the must-have styles.

To have any shot at halting steep sales and profit-margin declines, the old guard of Aeropostale and the like in the mall has to begin stringing together product wins for boys and girls. The effort to regain the attention of fickle teens has not gotten lost in the current back-to-school shopping season, with "camo" looks, rompers and '90s-inspired grunge ensembles being displayed prominently for full-price on the aforementioned retailer Web sites and in stores. Jogger pants, the well-publicized craze of this back to school, appear to have a bit of competition for the dollars earned by teens at their summer jobs.

Read More: Chipotle's CEO Monty Moran Unwraps the Restaurant's Success Story

The product wins couldn't come at a more pressing time for these mall stalwarts. With the exception of Pacific Sunwear (PSUN) that produced a second-quarter same-store sales increase of 0.3%, the teen apparel sector had another horrendous three-months:

  • Aeropostale: had a 13% same-store sales decline in the second quarter, following a 13% plunge in the first quarter.
  • Abercrombie & Fitch: same-store sales fell at Abercrombie & Fitch (-1%), abercrombie kids (-6%), and Hollister (-10%) in the second quarter. In the first quarter, same-store sales declined 1% at Abercrombie & Fitch, 6% at abercrombie kids, and 7% at Hollister.
  • Urban Outfitters: the Urban Outfitters division followed a 12% comparable net sales decline in the first quarter with a 10% fall in the second quarter.
  • American Eagle Outfitters: same-store sales declined 7%, building on a 10% decrease in the first quarter.
Stubbornly weak same-store sales for the sector are only part of the disturbing story. Year to date, Aeropostale, Abercrombie & Fitch, Urban Outfitters and American Eagle Outfitters have shed an astounding 2,030 basis points worth of gross margin according to data sourced from Bloomberg, amid still-high fixed costs (occupancy) and maneuvers by the companies to offer more competitively priced swag. The average stock price of the group has lost 5.8% in 2014, as investors have been unable to estimate when the profit margin erosion will finally cease, and management teams share some optimism on the future.

Watch More: Dyson CEO Shares How they Leave Competitors in the Dust

The photos below shed light on the top trends for teen apparel this back-to-school, and mostly represent merchandise that is not quickly finding its way onto the profit-busting clearance racks.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AEO $16.44 -0.39%
ANF $21.71 -0.32%
ARO $2.97 -5.10%
FL $60.74 0.26%
URBN $40.41 -0.32%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs