American Eagle Earnings Beat, Raises Holiday Outlook
American Eagle earnings beat third-quarter estimates and raised full-year operating-income guidance, prompting a post-market share rally for the holidays.
KEY TAKEAWAYS
- Q3 revenue $1.4 billion and GAAP EPS $0.53, net income $91 million.
- Raised Q4 comp-sales guidance to 8-9% and lifted FY adjusted operating income to $303-$308 million.
- Aerie comps rose 11%; gross margin fell 0.4 percentage points, citing a $20 million tariff headwind.
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On Dec. 2, 2025, American Eagle Outfitters (AEO) reported third-quarter fiscal 2025 earnings, beating estimates and raising full-year adjusted operating-income guidance after a record Thanksgiving weekend that boosted holiday demand.
Quarter Results and Guidance
The company said in a Business Wire press release at 4:10 PM ET on Dec. 2, 2025, and filed a Form 8-K with the SEC the same day, that third-quarter revenue reached $1.4 billion, GAAP earnings per share were $0.53, and net income totaled $91 million. Gross profit was $552 million and operating profit $113 million. Gross margin declined 40 basis points year over year to 40.5%, reflecting a $20 million tariff headwind.
The filing raised holiday sales guidance, forecasting fourth-quarter comparable-sales growth of 8% to 9% year over year. It lifted fourth-quarter operating-income guidance to $155 million–$160 million from a prior range of $125 million–$130 million and raised full-year adjusted operating income to $303 million–$308 million from $255 million–$265 million. The company expects full-year comparable sales to remain in the low single digits, assuming continued execution across merchandising, marketing, and operations.
Holiday Momentum and Margin Pressure
Total comparable sales grew 4% year over year in the quarter, driven by an 11% increase at Aerie and a 1% rise at the American Eagle brand, highlighting Aerie’s contribution to the results.
The press release credited celebrity marketing campaigns featuring Sydney Sweeney and Travis Kelce, along with a record Thanksgiving weekend, for accelerating demand across brands and channels. It noted strong growth at Aerie and in offline channels as part of the holiday lift. Jay Schottenstein, executive chairman and chief executive, said, "I'm extremely pleased with the significant trend change across our business."
The announcement sparked an AEO stock rally, with shares rising 11.8% in post-market trading.
