Core Insights - American Eagle Outfitters, Inc. (AEO) reported a high single-digit increase in comparable sales for the fourth quarter-to-date through January 3, 2026 [1] - The company raised its fourth quarter operating income guidance to between $167 million and $170 million, up from the previous estimate of $155 million to $160 million, reflecting an anticipated consolidated comparable sales increase of 8% to 9% [1] - CEO Jay Schottenstein highlighted record December sales driven by strong brand performance, particularly at Aerie and Offline, with continued growth at American Eagle [2] Financial Performance - Fourth quarter operating income guidance increased to $167 million to $170 million from $155 million to $160 million [1] - Anticipated consolidated comparable sales growth is projected at 8% to 9% [1] Market Reaction - In pre-market trading on NYSE, American Eagle Outfitters shares experienced a decline of 8.99%, trading at $24.40 [3]

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]

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 Performance - The company's operating income increased by 6% to $113 million, based on revenue of $136 billion[29] - Comparable sales increased by 4%[28] - Aerie's comparable sales increased by 11%[28] - Earnings per diluted share (EPS) were $053[28] - The company repurchased shares totaling $231 million in the first half of the year, including $21 million this quarter, and returned $64 million in cash dividends year-to-date[29] Fiscal Year 2025 Outlook - The company anticipates comparable sales to be up in the low single digits[30] - The company expects operating income to be between $303 million and $308 million on an adjusted basis[30] - The company projects depreciation and amortization to be approximately $216 million[30] Inventory - Ending inventory increased by 11% to $891232 thousand compared to the previous year[39]

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]