Core Insights - American Eagle Outfitters, Inc. (AEO) is anticipated to show revenue growth in its third-quarter fiscal 2025 results, with a consensus estimate of $1.32 billion, reflecting a 2.3% increase year-over-year [1] - The earnings consensus estimate stands at 43 cents per share, indicating a 10.4% decline from the previous year, although it has seen a slight increase in the last 30 days [2] Sales Performance - AEO's sales performance is expected to benefit from brand strength, particularly at Aerie, and positive demand in categories such as intimates, soft dressing, sleepwear, and activewear [3] - The company has made significant investments in digital channels, store optimization, and marketing campaigns, which are likely to support top-line growth [4] Cost and Profitability Challenges - AEO faces challenges from a tough operating environment, including weak consumer sentiment and inflation, which may impact profitability [5] - Increased costs related to selling, general and administrative (SG&A) expenses, advertising, and tariffs are expected to weigh on the company's profitability for the quarter [6] Earnings Prediction - The Zacks model indicates a strong likelihood of an earnings beat for AEO, supported by a positive Earnings ESP of +1.55% and a Zacks Rank of 2 (Buy) [7] Valuation and Stock Performance - AEO's forward 12-month price-to-earnings ratio is 15.27X, which is below the industry average of 16.62X, suggesting it offers compelling value for investors [10] - The stock has experienced a significant increase of 82.6% over the past six months, outperforming the industry, which saw a decline of 0.7% [10]

Core Viewpoint - Victoria's Secret & Co. will participate in a fireside chat at the Goldman Sachs 32nd Annual Global Retailing conference on September 4, 2025, featuring CEO Hillary Super and CFO Scott Sekella [1]. Company Overview - Victoria's Secret & Co. is a specialty retailer offering modern, fashion-inspired collections, including bras, panties, lingerie, apparel, casual sleepwear, swimwear, lounge, and sport items, as well as prestige fragrances and body care [3]. - The company operates leading brands, Victoria's Secret and PINK, and also includes Adore Me, a technology-driven, digital-first intimates brand catering to women of all sizes and budgets [3]. - Victoria's Secret & Co. employs over 30,000 associates and has approximately 1,380 retail stores across nearly 70 countries [3]. Event Details - A live audio webcast of the fireside chat will be available on the company's investor relations website, with a replay accessible afterward [2].

Core Viewpoint - Victoria's Secret & Co. reported first quarter financial results that exceeded expectations, reaffirming its full year 2025 sales guidance [1][2]. Financial Performance - The company reported net sales of $1.353 billion for the first quarter of 2025, surpassing the guidance range of $1.30 billion to $1.33 billion, and remaining flat compared to $1.359 billion in the first quarter of 2024 [5]. - Operating income for the first quarter of 2025 was $20 million, down from $26 million in the first quarter of 2024, with a net loss of $2 million, or $0.02 per diluted share, compared to a net loss of $4 million, or $0.05 per diluted share, in the prior year [6]. - Adjusted operating income for the first quarter of 2025 was $32 million, exceeding the guidance range of $10 million to $30 million, but down from $40 million in the first quarter of 2024. Adjusted net income was $7 million, or $0.09 per diluted share, near the high end of the guidance range [7]. Sales Outlook - For the second quarter of 2025, the company forecasts net sales between $1.380 billion and $1.410 billion, compared to $1.417 billion in the same quarter last year. Adjusted operating income is expected to range from $15 million to $35 million [8]. - The full year sales guidance remains at $6.2 billion to $6.3 billion, with adjusted operating income now expected to be between $270 million and $320 million, revised down from the previous range of $300 million to $350 million due to an estimated net tariff impact of approximately $50 million [9]. Business Strategy - The CEO emphasized the company's focus on customer experience, brand health, and product innovation, highlighting the strength in the Beauty business and PINK apparel [3]. - The CFO noted a disciplined approach to cost control and agility in responding to customer needs, aiming to build on the company's solid foundation [4]. Store Performance - Total net sales for the first quarter included $721.3 million from North American stores, $433.2 million from direct sales, and $198.4 million from international sales, with a total comparable sales decrease of 1% [17]. - The company operated 1,378 stores as of May 3, 2025, after opening 15 and closing 24 stores during the quarter [22].

Financial Data and Key Metrics Changes - For the full year 2024, total sales were approximately $611 million, with comparable sales growth of 1.5% and gross margin of 70.4% [18][26] - Adjusted EBITDA for the year was $107 million, while adjusted net income per diluted share was $3.47, reflecting a 4% increase [26][27] - Free cash flow for the year was $47 million, with cash from operations generating $65 million [27][28] Business Line Data and Key Metrics Changes - In Q4, total company sales were $143 million, down approximately 5% compared to the previous year [21] - Direct sales accounted for 50.5% of total sales in Q4, down 6.8% year-over-year due to a shift into markdown selling [24] - The strongest categories in Q4 included bottoms, outerwear, knit tops, and sleepwear, supported by marketing campaigns [9][80] Market Data and Key Metrics Changes - The retail channel saw a 1.9% increase in comparable sales for Q4, driven by strong conversion and average unit retail (AUR) [22] - Store sales for Q4 were down 3% due to calendar impacts, but new stores contributed approximately $1.1 million in revenue [22][23] - The company ended the year with a total of 252 stores, reflecting a net increase of eight stores [30] Company Strategy and Development Direction - The company plans to continue investing in new store growth, with expectations to open 20 to 25 net new stores by the end of 2026 [34] - The implementation of a new order management system (OMS) is expected to enhance omni-channel capabilities and improve customer experience [31][32] - Marketing strategies are being diversified, including geo-targeted efforts to drive customer engagement and store traffic [12][56] Management's Comments on Operating Environment and Future Outlook - The management noted that fiscal 2025 has started slowly, with consumer sentiment and adverse weather impacting performance [14][15] - The company is taking a prudent approach to its outlook for Q1 and the remainder of the year, considering macroeconomic uncertainties [15][19] - Management expressed confidence in the brand's potential for growth, emphasizing the importance of disciplined operating principles [16][36] Other Important Information - The company initiated a quarterly dividend and share buyback program, marking the first such actions since its IPO in 2017 [10][18] - Total reported inventories were up about 15% compared to the previous year, but normalized inventories were only up about 3% [29][84] - The company expects to spend approximately $25 million in capital expenditures for fiscal 2025, focusing on new stores and OMS rollout [35] Q&A Session Summary Question: Can you elaborate on the Q1 headwinds? - Management identified three main headwinds: adverse weather, consumer sentiment concerns, and the OMS implementation [40][41] Question: What benefits do you expect from the OMS? - The OMS is expected to provide operational efficiencies and enhance omni-channel capabilities, starting to yield benefits in the back half of the year [43][45] Question: How do you view gross margin trends for the year? - Management indicated that Q1 will be the most challenging comparison, with expectations for flat gross margins overall [50][52] Question: What are the traffic trends and how are you driving digital customers to stores? - Traffic has been challenged, but the company is testing geo-targeted marketing to drive store traffic [54][56] Question: How are promotions being managed in the current environment? - The company aims to maintain a disciplined promotional approach while responding to consumer price sensitivity [66][70] Question: What differences are observed between stores and digital channels? - Stores are more full-price oriented, while digital channels have shifted more towards markdowns [74]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per diluted share of $0.28, down from $0.34 in the same quarter last year [21] - Total sales were $545 million, a decrease of 2.4% year-over-year, with a 3% decline on a comparable sales basis [22] - Gross margin was 39.8%, down from 41.4% last year, indicating a normalized margin due to steady inventory flow [23] Business Line Data and Key Metrics Changes - Soma experienced a 2.1% net sales increase, with comparable sales down 0.5%, marking a sequential improvement over the last four quarters [22][5] - Chico's saw a 2.5% decline in comparable sales, while White House Black Market's comparable sales fell 5.7%, both on top of nearly 30% increases on a two-year stack basis [22] - Average dollar sale and units per transaction increased across all brands, offset by a decrease in transaction count [22] Market Data and Key Metrics Changes - The company gained market share among customers aged 45 and older with household incomes over $100,000, with Soma significantly outperforming the market in the same demographic [8] - Total inventory was down 11%, with on-hand inventory down 0.3%, indicating a healthy inventory position entering the second half of the year [9][26] Company Strategy and Development Direction - The company focuses on being customer-led, utilizing stores, digital platforms, and social media to enhance customer experiences and drive long-term growth [10] - The strategic pillars include being product-obsessed, digital-first, and operationally excellent, with ongoing investments in technology and marketing to support growth [20] - The company plans to manage expenses while investing in areas that drive customer growth and store productivity [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the back half of the year, citing positive customer responses to new fall assortments and a healthy inventory position [29] - The company expects total sales for fiscal 2023 to be flat to low single-digit growth compared to last year, with improving trends anticipated in Q3 and Q4 [28][29] - Management highlighted the importance of maintaining a balanced assortment and strategic promotions to navigate the current market environment [73] Other Important Information - The company ended the quarter with $151 million in cash and total liquidity of $386 million, with only $24 million in debt [24][25] - The redesigned loyalty programs have seen nearly 90% enrollment among apparel customers, driving higher units per transaction and average dollar sales [19] Q&A Session Summary Question: Can you expand on inventory and trend changes for Q4 by brand? - Management noted that total inventory was down 11%, with fresh fall inventories up 12%, indicating a healthy position for Q3 [34] Question: What are the factors affecting gross margin? - Management highlighted corporate savings and occupancy costs as key factors, with a moderate gross margin contraction expected for the year [38][39] Question: How are outlet trends progressing? - Management reported a rebound in outlet stores, with positive foot traffic and conversion rates, although digital outlet sales remained soft [42][43] Question: What is the status of customer reactivation? - Management indicated strong reactivation of lapsed customers, with new customer growth up across all brands [44] Question: How is the dress business performing at White House Black Market? - Management acknowledged a sequential improvement in sales, with inventory levels now balanced between fashion and basics [71] Question: Is there a trend back towards casual wear? - Management clarified that the trend is more about proportion changes rather than a strict shift towards casual or dressy styles [75]