NEW YORK (TheStreet) -- American Eagle Outfitters (AEO) is adrift after the abrupt departure of CEO Robert Hanson on Wednesday evening. The executive's departure comes at a poor time for the retailer after quarterly guidance painted a dismal sales picture over the holiday period.
By mid-morning, shares had tumbled 9.3% to $12.98, and 9.2 million shares had changed hands, well over its three-month average daily trading volume of 4.5 million.
Executive chairman Jay Schottenstein has been appointed interim CEO, effective immediately, while the board searches for a permanent candidate. Schottenstein previously held the position of CEO for a decade before stepping down in 2002.
Roger Markfield will also continue in his role as vice chairman and executive creative director, agreeing to postpone his retirement.
Earlier in the month, the retailer said sales for the January-ending quarter had so far fallen 2% to $882 million. Sales comps plummeted 7% over the nine weeks to Jan. 4.
"Following a solid Thanksgiving weekend, traffic and sales through Christmas week were on the low end of our expectations and the retail environment was highly promotional, pressuring margins and EPS," the now-departed Hanson said in a statement at the time.
On Thursday, Stifel downgraded American Eagle to "hold" from "buy" after noting the visibility of a turnaround is decreasing.
TheStreet Ratings team rates AMERN EAGLE OUTFITTERS INC as a Buy with a ratings score of B-. The team has this to say about their recommendation:
"We rate AMERN EAGLE OUTFITTERS INC (AEO) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."