American Eagle Stock Slides Despite Raised Q4 Outlook, Strong Holiday Sales

Core Insights - American Eagle Outfitters Inc. raised its fiscal fourth-quarter operating income outlook to $167 million to $170 million, up from the previous range of $155 million to $160 million, due to strong holiday demand and improved margins [3] - The company reported comparable sales growth of 8% to 9%, driven by disciplined margin execution, with Aerie showing low 20s percentage growth and American Eagle delivering low single-digit growth [2][3] - CEO Jay Schottenstein highlighted record December sales attributed to strong demand for new collections and effective marketing, with Aerie and Offline identified as growth leaders [4] Financial Performance - The updated operating income guidance reflects an increase of approximately $7 million to $10 million compared to previous estimates [3] - Comparable sales through January 3 rose in the high single digits, indicating overall strength across brands and channels [2] - Despite the positive outlook, the forecast includes about $50 million in pressure related to tariffs, consistent with earlier disclosures [3] Market Reaction - AEO shares experienced a decline of 5.22%, trading at $25.42 at the time of publication, despite the positive earnings outlook [5] - The stock recently reached 52-week highs, reflecting investor optimism surrounding the company's performance [4]