American Eagle Outfitters (NYSE:AEO) reported quarterly earnings this week, which sent shares higher. The big picture is that the company's sales were not that great, and the spring and summer assortments were not as good as the company had hoped, but the company did a great job clearing this inventory and is in good shape going into the back-to-school season (which to date has been better than last year). More importantly, because of average unit cost "AUC" reductions, the company was able to post strong merchandise margins, and more importantly, provide very strong gross margin commentary for the back half of the year (instead of AUC reductions, this will be driven by reduced markdowns). Overall, though sales were...
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