American Eagle Outfitters (AEO) has raised guidance for the fourth quarter (Q4) of fiscal year 2025 (FY25) following better-than-expected Q3 results. The company’s total net revenue for the quarter ended 1 November 2025 grew 6% year over year (YoY) to $1.36bn. Total comparable sales increased 4%, with performance varying across brands. American Eagle Outfitters operates the American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder and Unsubscribed brands in the US, Canada and Mexico. Aerie posted an 11% inc ...

Core Insights - American Eagle Outfitters (AEO) reported a gross profit of $552 million, a 5% increase from $527 million last year, with a gross margin of 40.5%, down 40 basis points from the previous year [1] - The company experienced a net tariff impact of $20 million, which affected the gross margin by 150 basis points [1] - Operating income rose from $106 million to $112 million, while net income increased from $80 million to $91 million [1] Sales Performance - AEO's third quarter revenue was highlighted by Aerie's double-digit comparable sales increase and positive growth at American Eagle, exceeding expectations [2] - Strong momentum continued into the fourth quarter, with a record-breaking Thanksgiving weekend driven by increased demand across brands and channels [3] Future Guidance - Based on stronger sales trends, AEO raised its fourth quarter operating income guidance to $155 to $160 million, anticipating comparable sales growth of 8% to 9% [4] - The previous guidance for fourth quarter operating income was $125 million to $130 million, based on lower single-digit comparable sales [5] - For the year, adjusted operating income guidance increased to $303 million to $308 million, up from prior guidance of $255 million to $265 million [5]

Financial Data and Key Metrics Changes - Total revenue increased by 6% to $1.4 billion, marking a record for the third quarter [6][18] - Operating income reached $113 million, exceeding guidance of $95-$100 million, driven by higher-than-expected demand [6][18] - Diluted EPS for the quarter was $0.53, a 10% increase compared to the adjusted EPS from the previous year [6][18] - Gross profit dollars increased by 5% to $552 million, while gross margin declined by 40 basis points to 40.5% [18][19] Business Line Data and Key Metrics Changes - Aerie's comparable sales (comps) grew by 11%, significantly outperforming American Eagle's 1% comp growth [7][18] - Aerie's performance was driven by strong demand across all categories, including intimates, apparel, and sleep [11][12] - American Eagle saw improvements in men's business, particularly in tops and jeans, contributing to the overall positive comp growth [13][14] Market Data and Key Metrics Changes - Aerie and Offline are emerging as important customer destinations, with Aerie generating nearly $2 billion in revenue and holding less than 5% market share, indicating significant growth potential [8][9] - The company reported a 4% increase in comparable sales, a notable improvement from the previous quarter's 1% decrease [7][18] Company Strategy and Development Direction - The company is focused on operational improvements and cost efficiencies to enhance profitability in a dynamic macro environment [5][6] - Incremental investments in advertising are aimed at driving stronger demand and enhancing long-term brand awareness [5][6] - The company plans to continue expanding Aerie and Offline, with 22 Aerie and 26 Offline store openings planned [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook, highlighting a meaningful turnaround from the first half of the year [10][17] - The fourth quarter is off to a strong start, with record performance during the Thanksgiving weekend [9][23] - The company raised its fourth quarter operating income guidance to a range of $155-$160 million, based on expected comp sales growth of 8%-9% [23][24] Other Important Information - The company is on track to close about 35 lower productivity Aerie stores while remodeling 50 Aerie stores to enhance customer experience [21][22] - The balance sheet remains strong, with cash of $113 million and total liquidity of approximately $560 million [23] Q&A Session Summary Question: Can you discuss the acceleration in the fourth quarter and the drivers behind it? - Management indicated that both brands are trending ahead of expectations, with Aerie expected to see high teens comp growth and American Eagle in the low to mid-single digits [27] Question: What are the new denim silhouettes that are performing well? - Denim has been strong, particularly in women's, with new silhouettes gaining traction and out-of-stocks being addressed [29] Question: What are the drivers of Aerie's same-store sales improvement? - Aerie's performance is attributed to strong customer acquisition, effective marketing strategies, and a focus on core competency businesses [33][34] Question: What are the expectations for markdowns in the fourth quarter? - Management expects markdowns to be similar to the third quarter, with a focus on maintaining competitive pricing while driving top-line growth [36][39] Question: Can you elaborate on customer acquisition trends? - The company has seen strong customer acquisition across both brands, with strategies in place to retain these customers [51][52] Question: What are the plans for store openings and closures? - The company plans to close about 35 lower productivity stores while opening a similar number of new Aerie and Offline stores [61][62]

THIRD QUARTER 2025 Investor Presentation Safe Harbor Statement Under The Private Securities Litigation Reform Act Of 1995 "I'm extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations—all having a positive impact. Record third quarter revenue was highlighted by Aerie's double-digit comparable sales increase and positive growth at American Eagle, contributing to results that exceeded expectations. Strong momentum has ...

Core Points - American Eagle Outfitters, Inc. (AEO) will report its third quarter fiscal 2025 results on December 2, 2025, after market close [1] - A live conference call summarizing AEO's second quarter results will take place on the same day at 4:30 PM (EST) [2] - AEO is a leading global specialty retailer with a portfolio of brands including American Eagle, Aerie, and OFFL/NE by Aerie, focusing on casual and high-quality apparel [3][4] Financial Highlights - AEO announced a quarterly cash dividend of $0.125 per share, payable on October 29, 2025, to stockholders of record as of October 10, 2025 [7] - The company reported an improvement in its second quarter fiscal 2025 results, driven by higher demand, lower promotions, and well-managed expenses [8] Product Collaboration - AEO launched a limited-edition collaboration with Tru Kolors by Travis Kelce, merging fashion, sports, and culture [9]

Core Viewpoint - Analysts expect American Eagle Outfitters (AEO) to report a quarterly loss of $0.19 per share, reflecting a significant year-over-year decline of 155.9%, with revenues projected at $1.09 billion, down 4.6% from the previous year [1] Financial Projections - The consensus estimate for total net revenue for American Eagle is $680.05 million, indicating a year-over-year decline of 6.2% [4] - Analysts anticipate total net revenue for Aerie to be $357.42 million, representing a decrease of 4.1% compared to the same quarter last year [4] - The projected number of total stores at the end of the period (EOP) is 1,175, slightly up from 1,173 in the previous year [4] Store Metrics - The number of stores for the AE Brand is expected to reach 824, down from 846 in the same quarter last year [5] - The number of stand-alone Aerie stores is projected to be 326, an increase from 307 a year ago [5] - The total gross square footage is expected to be 7.27 million square feet, up from 7.22 million square feet in the previous year [6] Operating Income - Analysts forecast operating income for Aerie to be $58.72 million, down from $61.33 million in the same quarter last year [7] - The expected operating income for American Eagle is $123.95 million, a decrease from $138.59 million reported in the same quarter last year [8] Stock Performance - Over the past month, American Eagle shares have declined by 3.4%, contrasting with a 10.7% increase in the Zacks S&P 500 composite [9] - Based on its Zacks Rank 3 (Hold), AEO is expected to perform in line with the overall market in the upcoming period [9]