NEW YORK (TheStreet) --Shares of American Eagle Outfitters Inc. (AEO) are down 5.35% to $13.08 after the teen retailer announced that it plans to target dogs with a new line called "American Beagle Outfitters," as it struggles to sell its existing clothing line, Bloomberg reports.
Like its peers in the teen-clothing business, American Eagle faces sluggish customer traffic and a lack of new fashion trends, according to Bloomberg, adding that in order to jump-start the company, interim CEO Jay Schottenstein has been clearing out merchandise and closing underperforming stores.
A dog collection may not be the worst way to jolt sales, Bloomberg says, citing that Americans were expected to spend $350 million on pet costumes this Halloween, according to the National Retail Federation.
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Separately, TheStreet Ratings team rates AMERN EAGLE OUTFITTERS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERN EAGLE OUTFITTERS INC (AEO) a HOLD. The primary factors that have impacted our rating are mixed--some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."