American Eagle Outfitters (AEO) surged nearly 10% last week on the back of impressive Q1 earnings. From a merchandising perspective, the brand has implemented a just-right mix of trends (pictured) that their core customers are looking for and merchandised with get-the-look simplicity that helps shoppers find the right pieces. Riding high is the authentic American trend with the signature plaid shirts layered with tees and denim, as well as higher waisted denim in varying lengths and finishes. We’ve noted this season how American Eagle has been among the best at interpreting trends in a mix that provides enough newness without crowding out tried-and-true selections.
By contrast, Abercrombie (ANF) continues to flounder—reaching a 52-week low—despite faster merchandise refreshes and a more on-trend product mix. While we’re encouraged by the product changes, there is still a major brand perception problem and lack of leadership to steward the company through this transition. Perhaps symbolically, the company’s sale of former CEO Mike Jeffries private jet represents the ultimate fall from its exclusive perch towards a more inclusive and approachable brand. We’re hopeful that the brand will reinvent itself with the proper leadership and changes to its marketing, but things don’t look so buff for the foreseeable future.
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