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The company, whose shares rose 9% on Monday, said it intends to complete the share purchase in connection with its existing authorization of 68.5 million shares.
Shares of American Eagle Outfitters, Inc. (AEO) rose nearly 9% to $12.03 on Monday and edged up in extended trading after the apparel and accessories retailer entered into an accelerated share repurchase agreement with Bank of America Corp (BAC) to repurchase $200 million of its common stock.
Based on Friday's closing price, that's about 18.1 million shares and represents about 9.5% of American Eagle's fully diluted outstanding stock.
"We are pleased to announce an accelerated share repurchase program, which reflects our strong capital position and confidence in our long-term strategic growth plan," executive chairman and CEO Jay Schottenstein said in a statement.
Buybacks typically reflect management's confidence in the business. They could also signal that the company doesn’t see many lucrative opportunities to invest cash.
American Eagle said it intends to complete the share purchase in connection with its existing authorization of 68.5 million shares.
The move comes after the recent weakness in shares.
Retail sentiment for AEO on Stocktwits ended on a 'bearish' level on Monday, a slight improvement from ‘extremely bearish’ a day ago.
The stock has been under pressure in the aftermath of a mixed fiscal fourth-quarter earnings report and disappointing 2025 guidance.
However, retail chatter has been 'extremely high' of late, soaring 450% in the past week.
One user said they were starting a position in American Eagle.
Another user suggested that Abercrombie & Fitch Co. (ANF), which recently announced a $1.3 billion share repurchase authorization, could be a better investment versus American Eagle and other retailers.
American Eagle shares are down 28.6% year to date and about 54% from last year's high.
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