American Eagle stock soars on improving inventory, sales conditions

Shares of American Eagle popped in afternoon trading thanks to Q3 inventory improvements and better-than-expected sales.

Video Transcript

SEANA SMITH: All right, my pick today is American Eagle. It's a top trending ticker on Yahoo Finance and an outperformer in today's action. You can see the stock up nearly 17%. That's the biggest intraday jump that we have seen in just about two years. Now, third quarter inventory improvements and better than expected sales are the main drivers of this massive move to the upside. Inventory, let's put this in perspective, it was up 8% from a year ago. But that is a massive improvement from last quarter's increase of 36%.

So, Dave, we're looking at a three-month chart here. Year to date, the stock has been under pressure, but clearly, in today's market performance at what we've seen over the last three months, American Eagle has been able to outperform Wall Street's expectations. We talk, though, though, that the bar has been set so low for many of these retailers. So, yes, they outperformed, but relatively speaking to the past couple of years, not that big of a jump.

DAVE BRIGGS: I think Jared made a great point. He opened the show that the bar was so low, they could just step over it. But we're seeing it sectorwide. I mean, we saw Abercrombie & Fitch is up about, what, 20%, I think, on the day. Best Buy had some great earnings based on lowered expectations. It is a weird recession, though. I mean, you're talking about consumer debt is at a 20-year high. Consumer savings are low. And people are still spending in the face of all of this. It's going to be an interesting holiday shopping season.