The Gap Inc. (GPS)’s Thin Black Line

While I’ve been a big Gap fan for the past year, American Eagle is quietly expanding its offerings, giving it a potentially broader customer base. Even after its good showing, the company’s P/E hasn’t pulled ahead of Gap’s, with both companies trading at just over 16 times earnings.

With Abercrombie & Fitch Co. (NYSE:ANF) posting a 5% drop in comparable sales last year, and Areopostale running at a 2% decline, it seems that American Eagle is having the most success pulling customers in. While the company doesn’t have the size or brand value that The Gap Inc. (NYSE:GPS) has, American Eagle has a lot going for it right now. Investors looking for another apparel retailer should expand their horizons, and look at this smaller winner.

The article 1 Smaller Retailer With a Big Future originally appeared on Fool.com and is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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