NEW YORK ( TheStreet) -- American Eagle Outfitters ( AEO) is a specialty retailer that designs, markets and sells its own brand of trendy, high-quality clothing, accessories and personal care products at affordable prices, targeting the 15-25-year-old demographic. Close competitors in the youth apparel market include Abercrombie & Fitch ( ANF) and Aeropostale ( ARO). The American Eagle Outfitters stores division contributes 49% of the $26 Trefis price estimate for American Eagle's stock.American Eagle's profit margins have plunged in recent years, mostly due to markdowns and promotions during the recession. We believe that margins will recover significantly during the forecast period, driven by aggressive cost-cutting and rising consumer demand. In a scenario where margins fail to recover from last year's trough level, our estimate would drop by about 13%, to $22.15.