AEO Inc. Reports Strong Third Quarter Fiscal 2025 Results, Raises Q4 Outlook
American Eagle Outfitters (AEO) Inc., reported robust third-quarter fiscal 2025 results, with total revenue reaching a record US$ 1.36 billion, up 6% year-on-year. Total comparable sales rose 4%, led by Aerie, which delivered double-digit growth of 11%, while American Eagle comps increased 1%.
“I’m extremely pleased with the significant trend change across our business, reflecting decisive actions in merchandising, marketing and operations,” said Jay Schottenstein, Executive Chairman and CEO of AEO Inc. “Record third-quarter revenue was highlighted by Aerie’s strong performance and positive growth at American Eagle, driving results that exceeded expectations.”
Gross profit for the quarter increased 5% to US$ 552 million, with a gross margin of 40.5%, down 40 basis points due to a US$ 20 million tariff impact, partially offset by favourable sales and lower freight costs. Buying, occupancy and warehousing expenses leveraged 20 basis points, while SG&A expenses rose 10% to US$ 386 million, reflecting planned advertising investments. Operating profit was US$ 113 million, up from US$ 106 million in the prior year, with an operating margin of 8.3%. Adjusted operating profit stood at US$ 124 million with a margin of 9.6%. Diluted earnings per share were US$ 0.53, up 29% from last year, while adjusted EPS increased 10%.
Inventory at quarter-end totaled US$ 891 million, up 11% year-on-year, driven by rising demand, new store openings and improved in-stock positions. Units increased 8%, and inventory costs reflect the impact of tariffs.
AEO returned US$ 21 million to shareholders via its quarterly cash dividend of US$ 0.125 per share, bringing year-to-date dividends to US$ 64 million, alongside US$ 231 million in share repurchases completed earlier in the year. Capital expenditures in the quarter totaled US$ 70 million, with year-to-date spend of US$ 202 million; full-year 2025 capex is expected to reach approximately US$ 275 million.
Looking ahead, AEO raised its fourth-quarter operating income guidance to US$ 155–160 million, reflecting comparable sales growth of 8%–9%, up from the prior guidance of US$ 125–130 million based on low single-digit comp growth. For the full fiscal year, adjusted operating income guidance now ranges from US$ 303–308 million, with comparable sales in the low single digits, compared to previous guidance of US$ 255–265 million on flat comps.
Schottenstein added, “Momentum continues into the fourth quarter, with an excellent start to the holiday season. Record Thanksgiving weekend results highlight strong demand across brands and channels, particularly at Aerie and offline stores. We remain focused on finishing the season strong and sustaining this success into 2026 and beyond.”
