Jefferies Remains Bullish as AUC Tailwinds Drive American Eagle Outfitters' (AEO) Strong 4Q

Jefferies reiterated a Buy rating and $24.00 price target on American Eagle Outfitters (NYSE: AEO) following the company's 4Q earnings report. AEO reported another solid quarter, with healthy comp gains, a flat GM, and slight SG&A leverage. AEO pointed to AUC tailwinds driving the majority of gross margin gains in FY'17, in part due to a favorable external sourcing environment. While benefiting the GM, this also allows AEO to reinvest in product quality and detailing.

Analyst Randal Konik commented, "AEO posted a solid quarter, and sees strength continuing into 1Q, supporting our view that spending share shifts are continuing toward non-durable goods. Further, AEO is benefiting from lower input costs, consistent with our thesis that the apparel space should benefit from margin tailwinds in FY'17. We see AEO as poised to continue to gain share and reiterate our Buy rating."

For an analyst ratings summary and ratings history on American Eagle Outfitters click here. For more ratings news on American Eagle Outfitters click here.

Shares of American Eagle Outfitters closed at $15.44 yesterday.

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