American Eagle shares rise after analyst day

Shares rose $1.26, or 9.9 percent, to close at $13.96. The stock has traded between $11.87 and $27.96 in the past 52 weeks.

The Pittsburgh-based retailer hosted an analyst day on Tuesday, and analysts said the company has a clear plan to improve the business.

"They did a good job explaining what they felt has hurt the business over the last several months and the clear steps they are taking to improve things," said RBC Capital Markets analyst Howard Tubin.

The company has faced falling sales in stores open at least one year, a key retail metric known as same-store sales, for the past two quarters. Consumers are cutting back discretionary spending amid a difficult retail environment. Meanwhile, lower-price rivals such as Aeropostale Inc. have fared better.

"Their assortment got a little bit stale and in order to fix that they increased the level of sophistication," Tubin said.

That means stocking things such as lightweight scarves that teens can wear both during the day and night as well as more casual T-shirt and jean offerings, according to Tubin, who rates the company "Outperform."

In a note to investors on Wednesday, SunTrust Robinson Humphrey analyst Robin Murchison said the company also plans to increase its value message, particularly in women's tops.

"Focus groups held since late last year suggest a shift in customer preference and American Eagle is reacting," she wrote. "Going forward, we can expect lower opening price points in some key women's categories, mostly tops including tees and hoodies."

She affirmed a "Buy" rating on the stock.