American Eagle Outfitters‘ (AEO) AEO stock is down 6% pre-market on the news that CEO Robert Hanson is exiting the company.
Executive Chairman Jay Schottenstein has been named the interim CEO.
American Eagle officials said they are immediately looking for a permanent replacement.
Wednesday’s announcement comes on the heels of bad holiday sales: American Eagle reported earlier this month that total revenue for its holiday season sales period dropped 2% and revenue in stores open at least one year fell 7%.
The move, which something the company clearly hopes gives AEO better positioning moving forward, was not something investors wanted to see happen.
At the same time, Jefferies’ analyst Randal Konik maintained a “Buy” rating and $19 price target for American Eagle.
Eric Beder of Brean Capital told the Associated Press that Hanson was “the best and most well-balanced among CEOs for teen retailers that also include Aeropostale Inc. and Abercrombie & Fitch Co.”
Howard Tubin with RBC Capital Markets wrote in a note to clients that American Eagle had a strong 2012 but that “business took a turn for the worse” last year, putting it “in the same boat as most other youth-oriented retailers.”
AEO stock is down 32% in the past 12 months.