American Eagle Outfitters Inc, a teen apparel retailer, predicted a current-quarter profit that missed the estimates of analysts. The company also reported its fifth consecutive fall quarterly income. The reason for their consecutive quarterly income decline is that the company was hurt by online competition and weak mall traffic. Well, we cannot deny the very fact that people nowadays are now resorting to shopping online instead of shopping in malls.
Shares of American Eagle Outfitters declined by as much as 6.8 percent to $12.88 in trading. The company also said that would close a total of 150 stores in North America within the next three years.
American Eagle Outfitters is not the only teen apparel retailer that has been struggling. Other teen apparel retailers, such as Abercrombie &Fitch Co and Aeropostale Inc, are also struggling when it comes to improving sales due to the fact that shoppers nowadays usually choose to shop online and choose to buy gadgets instead.
Another reason why sales of these teen apparel retailers is due to the tough competition coming from fast-fashion brands, which include Forever21, H&M and Zara, which are known to deliver the latest styles from the fashion runway to their stores within just a week.