American Eagle Outfitters ( AEOS) saw its same-store sales shrink in November, dragged down by a poor showing by its Canadian subsidiary and weak performance of its men's clothing line. Same-store sales at the apparel retailer declined by 6.5% companywide. That includes a 4.9% decline in comparable store sales at its core American Eagle division and a whopping 30.1% decline at its Bluenotes/Thriftys division, which operates stores in Canada. Overall sales at the Bluenotes/Thriftys subsidiary fell from $8.4 million in November last year to $5.9 million last month. American Eagle said it was trying to jump-start sales at the Canadian division by adjusting the chain's merchandizing, branding and pricing, company spokeswoman Laura Weil said on a conference call. Bluenotes/Thriftys' November results were "well below our expectations," Weil said. American Eagle has already attempted to reposition the Bluenotes/Thriftys brand and it may have moved too quickly, confusing customers, said Marcia Aaron, an analyst with Pacific Growth Equities. Pacific Growth does not have a banking relationship with American Eagle. "They may have gone too far with their repositioning efforts. They need to reassess where they are going with that," she said. Sales at the company's American Eagle stores were largely affected by the promotions the company is running on its men's clothing, Weil said. The promotions meant that the average unit retail price declined in the month, compared to last year, Weil said.
Weil also blamed the same-store sales decline on the last Thanksgiving Day weekend, which fell on the fourth weekend of the month this year compared with the third weekend last year. But the company's Thanksgiving weekend same-store sales declined compared with the same period last year and were lower than expected, she said. "November sales were at the low end of our plan," she said. American Eagle expects a low single-digit decline in comparable store sales in December and reaffirmed that it expects to post earnings of 56 cents per share for the fourth quarter. The company earned 60 cents per share in its fourth quarter that ended February 2, 2002.