American Eagle Exceeds Expectations, Boosts Holiday Forecast

NEW YORK, U.S. – American Eagle Outfitters announced a positive holiday outlook on Tuesday after reporting better-than-expected earnings for the third quarter, raising its full-year forecast in the process.

The apparel company predicts a 8% to 9% increase in fiscal fourth-quarter comparable sales, significantly outperforming analysts’ expectations of only 2.1%. The updated guidance suggests adjusted operating income for the full year will fall between $303 million and $308 million, an increase from the previous range of $255 million to $265 million.

Shares of American Eagle rose as much as 15% in extended trading following the announcement. For the three-month period ending on November 1, the company reported a net income of $91.34 million or 53 cents per share, up from $80.02 million or 41 cents per share a year earlier. Sales climbed to $1.36 billion, reflecting a 6% increase from $1.29 billion the previous year.

This quarter marks the first full impact of American Eagle’s marketing partnership with actress Sydney Sweeney, which the company claims is successfully attracting more customers. Companywide, comparable sales grew 4%, surpassing expectations of 2.7% according to StreetAccount. However, American Eagle’s brand saw only a modest growth of 1% in comparable sales, falling short of the anticipated 2.1%.

Aerie, American Eagle’s intimate apparel line, was a key driver for the impressive sales, seeing comparable sales jump 11% and overall revenue rise by 13%. Despite the mixed performance, American Eagle’s operating margin for the quarter was 8.3%, outperforming expectations of 7.5%.

American Eagle also noted strong momentum from its record revenue in the third quarter, particularly benefiting from a strong performance during Thanksgiving weekend. The holiday guidance comes amidst a landscape where competitors like Gap and Abercrombie & Fitch reported better-than-expected results as well.

The National Retail Federation observed that the five-day period from Thanksgiving through Cyber Monday exceeded initial expectations, suggesting resilient consumer spending despite rising prices.