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PITTSBURGH - American Eagle Outfitters, Inc. (NYSE:AEO) shares surged 11.8% after the retailer posted better-than-expected third quarter results and significantly raised its fourth quarter guidance, driven by strong momentum across its brands.
The company reported third quarter earnings per share of $0.53, handily beating analyst estimates of $0.43, while revenue reached a record $1.36 billion, exceeding the consensus forecast of $1.32 billion. Total comparable sales increased 4% YoY, with Aerie delivering impressive 11% comparable sales growth and American Eagle posting a 1% increase.
"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," said Jay Schottenstein, Executive Chairman and CEO.
Based on continued strong performance, American Eagle raised its fourth quarter operating income guidance to $155-$160 million, up from its previous outlook of $125-$130 million, with comparable sales now expected to grow 8-9% versus earlier projections of low single-digit growth.
Gross profit rose 5% to $552 million, though gross margin declined slightly by 40 basis points to 40.5%, primarily due to a $20 million tariff impact. Operating profit increased to $113 million compared to $106 million last year.
"Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season," Schottenstein added. "We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and Offline."
For the full fiscal year, the company now expects adjusted operating income of $303-$308 million, up from its previous guidance of $255-$265 million, with comparable sales in the low single digits.
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