American Eagle Hikes Q4 Outlook On Stronger Sales Trends

The company raised its fourth quarter operating income guidance to $155 to $160 million, up from its previous guidance of $125 to $130 million on stronger sales trends.

• For the three months through the end of September, the company reported diluted earnings per share of $0.53, up from $0.41 in the corresponding quarter of 2024.
• The company expects comparable sales to rise in low single digits for the year, compared to its former expectations of flat growth. 
• Net tariff impact for the year is expected to be nearly $70 million, including about $50 million in the fourth quarter.

American Eagle Outfitters, Inc. (AEO) on Tuesday raised its fourth-quarter outlook after the company’s last quarter earnings beat Wall Street expectations.

The company has made a major push to increase demand over the past few months after struggling in recent quarters with its many marketing initiatives including one featuring actress Sydney Sweeney titled “Sydney Sweeney Has Great Jeans,” to boost sales for its denim brand. The company in August also launched a limited-edition brand collaboration with Tru Kolors, Kansas City Chiefs star Travis Kelce’s sportswear and lifestyle clothing line.

Q3 Earnings

For the three months through the end of September, the company reported diluted earnings per share of $0.53, up from $0.41 in the corresponding quarter of 2024, and above an analyst estimate of $0.44, according to data from Fiscal AI.

Q3 Revenue rose 6% to $1.36 billion, as comparable sales increased 4%, to up analyst estimates of $1.32 billion. The company also incurred a net tariff impact of $20 million in the quarter as it sources its apparel from multiple regions outside the U.S.

Looking Ahead

The company on Tuesday raised its fourth quarter operating income guidance to $155 to $160 million, up from its previous guidance of $125 to $130 million on stronger sales trends running up to the holiday season. The company expects comparable sales growth of 8% to 9% in the quarter now, while it had previously forecast growth only in low single digits.  

For the full year, the company now expects adjusted operating income of  $303 to $308 million up from its former guidance of $255 to $265 million. The company expects comparable sales to rise in low single digits for the year, compared to its former expectations of flat growth.

Net tariff impact for the year is expected to be nearly $70 million, including about $50 million in the fourth quarter.

How Did Stocktwits Users React?

AEO shares jumped a 10% after hours at the time of writing. On Stocktwits, retail sentiment around AEO jumped from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume increased from ‘high’ to ‘extremely high’ levels

AEO stock has risen 25% this year and by about 5% over the past 12 months.