Why American Eagle Outfitters Stock Surged Today
Key Points
American Eagle's same-store sales are accelerating.
Management lifted its full-year earnings forecast.
- 10 stocks we like better than American Eagle Outfitters ›
Shares of American Eagle Outfitters (NYSE: AEO) popped on Wednesday after the clothing purveyor's profits topped investors' expectations.
By the close of trading, AEO's stock price was up more than 15%.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: American Eagle Outfitters.
American Eagle's sales are strengthening
AEO's revenue rose 6% year over year to $1.4 billion in its fiscal third quarter ended Nov. 1, driven by new store openings and higher sales at existing locations. The company's total comparable sales grew 4%, a marked improvement from the 1% decline in the second quarter and 3% shortfall in the first quarter.
AEO's Aerie brand delivered particularly impressive same-store sales growth of 11%, while the company's namesake American Eagle brand also returned to growth, with comp sales rising 1%.
"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," CEO Jay Schottenstein said in a press release.
The retailer's popular marketing campaigns with actress Sydney Sweeney and football icon Travis Kelce are helping to boost its brand awareness among shoppers. The two partnerships together generated a whopping 44 billion ad impressions.
All told, AEO's adjusted earnings per share jumped 10% to $0.53. That bested Wall Street's estimates, which had called for per-share profits of $0.44.
American Eagle sees a strong holiday selling season ahead
These results, along with encouraging ongoing sales trends, prompted AEO to boost its financial outlook. Management now expects fourth-quarter operating income of $155 million to $160 million -- up from a prior forecast of $125 to $130 million -- fueled by comp sales growth of 8% to 9%.
The company, in turn, lifted its full-year operating profit target to $303 million to $308 million, up from $255 million to $265 million.
"Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season," Schottenstein said. "We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels."
Should you invest $1,000 in American Eagle Outfitters right now?
Before you buy stock in American Eagle Outfitters, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Eagle Outfitters wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $589,717!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,111,405!*
Now, it’s worth noting Stock Advisor’s total average return is 1,018% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 1, 2025
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends American Eagle Outfitters. The Motley Fool has a disclosure policy.
Recommended Articles
