American Eagle Outfitters lifts full-year outlook after Q3 revenue rise

Core Insights - American Eagle Outfitters (AEO) has raised its guidance for Q4 FY25 following better-than-expected Q3 results, with total net revenue growing 6% YoY to $1.36 billion [1] - The company operates multiple brands including American Eagle, Aerie, and others across the US, Canada, and Mexico [1] Financial Performance - Aerie experienced an 11% increase in comparable sales, while American Eagle saw a 1% increase [2] - Gross profit rose by 5% to $552 million, although gross margin decreased by 40 basis points to 40.5% due to a $20 million net tariff impact and higher markdowns [2] - Operating profit reached $113 million, up from $106 million in the same period last year, with diluted earnings per share increasing by 29% YoY to $0.53 [3] Shareholder Returns and Capital Expenditure - The company returned $21 million to shareholders through dividends in Q3, totaling $64 million for the year [4] - Full-year capital expenditure is projected to be approximately $275 million [4] Future Outlook - AEO has lifted its Q4 operating income forecast to $155 million–$160 million, assuming comparable sales growth of 8–9% [4] - The full-year adjusted operating income outlook has been raised to $303 million–$308 million, up from the previous range of $255 million–$265 million [4] - Despite the improved earnings guidance, AEO expects gross margin to decline YoY in both Q4 and FY25, citing an anticipated net tariff impact of approximately $50 million in Q4 and $70 million for FY25 [5]