The "American Eagle" brand and name are the company's biggest asset. Unfortunately they have hardly any international exposure. In addition, the great deflation hits retailers the hardest and is still going on--they must continue to close old fashioned mall stores, focus on the internet, and make international exposure a priority #1.
They will lose more investors if they cut the dividend so this option should be weighed very cautiously.
The stock is getting vary volatile around the $10-$11 level. I suspect it is going to need to test the $8 area at the very least. Finally, the biggest concern I would have as an investor holding this stock: What if the market goes through a sell off of 10% or more? Reits, retailers, and non money making companies will get murdered.