American Eagle sales surge fueled by strong growth at Aerie; opening 40 stores
American Eagle Outfitters Inc. reported record first-quarter revenue as Aerie continued to drive strong growth, offsetting disappointing sales at its namesake banner.
The apparel retailer’s total net revenue increased 10% to $1.20 in the quarter ended May 2, topping the analyst estimate of $1.19 billion. Total comparable sales increased 8%.
By banner, Aerie comparable sales grew 25%. American Eagle comparable sales decreased 2%.
“Aerie is firing on all cylinders, delivering repeatable growth, by aligning seasonal trends, with elevated brand visibility, perception, and a more engaged customer base," Jennifer Foyle, AEO’s president and executive creative director, said on the earnings call.
Foyle attributed the sales declines at American Eagle primarily to its women’s bottoms business with styles and fits that missed, coupled with a colder spring, which impacted demand in several seasonal categories.
American Eagle’s net income totaled $23.53 million, or $0.14 per share, for the quarter ended May 2, compared with a loss of $64.90 million, or $.36 per share in the year-ago period. Analysts had expected earnings per share of $0.12.
Gross profit of $456 million rose 41% from $322 million last year. The gross margin of 38.2% increased 860 basis points to last year.
“This quarter reflected the strength of our portfolio and the power of Aerie,” stated executive chairman and CEO Jay Schottenstein. “While results at American Eagle were mixed, our teams are moving decisively to reignite the women’s business and strengthen product execution and brand positioning.”
On the earnings call, Schottenstein said that while May started slowly for the American Eagle brand, the company is encouraged by the improvement in the business over the last few weeks.
“We remain highly confident in the relevance and resilience of the overall AE brand and in our ability to strengthen execution and drive better results moving forward,” he told analysts.
Stores
American Eagle expects about 25 net closures for its namesake brand in 2026, along with 40 openings for its Aerie and Offline brands. More than 80 American Eagle remodels are planned.
The retailer reiterated its full-year guidance. It expects mid-single digit percentage comparable sales growth and an increase in gross margin.
The company ended the quarter with 1,170 stores, including 804 American Eagle stores, 335 Aerie stores, 23 Todd Snyder stores and eight Unsubscribed stores.
