Dive Brief:

• American Eagle Outfitters may have found a way out of the downward discount spiral so many retailers find themselves in. Q1 same-store sales rose 7% and gross profit rose 2.6 percentage points to 37.5% of sales, and the retailer expects similar Q2 numbers. 

• The teen apparel retailer, like Gap, Abercrombie & Fitch, and Aeropostale, has been working its way out of a slump, improving the quality of its jeans with new fabrics and keeping less inventory on hand in part through changes to inventory management. 

• The company’s lingerie brand, Aerie, has also differentiated itself by making a point of eschewing the use of Photoshop in marketing.

Dive Insight:

These are early numbers, so this story isn’t really over. But American Eagle Outfitters appears to be first out of the gate in offering shoppers something they’re willing to pay for with its new jean lines.

This is the kind of differentiation that has been sorely lacking among apparel retailers trying to appeal to teenagers who, faced with inventory that essentially looks the same everywhere, are left to compare on price.

The retailer’s Aerie brand is a small portion of its business, but, with its Photoshop-free marketing, has brought a sense of sanity to the unattainable “angel” approach of much larger rival Victoria’s Secret.

“Everybody makes jeans, and most everybody is competing on pricing down,” Chad Kessler, global brand president for American Eagle Outfitters, told Fortune. “I don’t know that you can get off the merry-go-round without having something the customer is going to respond to.”