On March 4, 2026, American Eagle Outfitters, Inc. (NYSE: AEO) announced robust financial results for the fourth quarter and fiscal year that ended on January 31, 2026. The company's performance reflects a successful turnaround and growth strategy, particularly in its Aerie and OFFLINE brands.

Jay Schottenstein, Executive Chairman and CEO of AEO Inc., expressed his satisfaction with the company’s execution during the latter half of fiscal 2025. He noted, “I am extremely pleased with the strong execution in the back half of the year, which reignited growth across our brands and channels.” This sentiment is underscored by a record fourth quarter, showcasing double-digit growth at Aerie and OFFLINE, alongside solid performance at American Eagle.

2. Fourth Quarter Highlights

Total Net Revenue: For the fourth quarter, American Eagle reported total net revenue of $1.8 billion, marking a 10% increase compared to the previous year.

Comparable Sales Growth: Total comparable sales saw an 8% increase, building on a 3% growth from last year. Aerie led the charge with a staggering 23% growth, while American Eagle experienced a more modest 2% growth.

Gross Profit: The gross profit amounted to $651 million, a 9% increase from $599 million in the prior year. However, the gross margin slightly declined to 37.0%, impacted by tariffs and markdowns.

Adjusted Operating Profit: Adjusted operating profit rose by 27% to $180 million from $142 million last year, with an adjusted operating margin expanding to 10.2%.

Earnings per Share: GAAP diluted earnings per share stood at $0.50, slightly down from $0.54 last year, while adjusted diluted earnings per share surged to $0.84, up from $0.54.

Fiscal Year 2025 Overview

Total Net Revenue: The company’s total net revenue for fiscal year 2025 reached $5.5 billion, reflecting a 3% increase year-over-year.

Comparable Sales: Comparable sales increased by 3%, following a 4% growth in the previous year.

Gross Profit: The gross profit for the year was $2.0 billion, although it decreased 3% compared to last year, largely due to an inventory write-down.

Net Income: GAAP diluted earnings per share for the fiscal year were $1.09, down from $1.68 the previous year, while adjusted diluted earnings per share were $1.50, compared to $1.74 last year.

3. Inventory and Shareholder Returns

American Eagle reported a 10% increase in total ending inventory to $702 million, reflecting the impact of tariffs. The company also demonstrated a commitment to shareholder returns, repurchasing one million shares for $25 million in the fourth quarter, bringing the total for the year to 21 million shares for $256 million. Additionally, the company returned $21 million to shareholders through dividends, totaling $85 million for the fiscal year.

4. Capital Expenditures and Future Outlook

For the fourth quarter, capital expenditures totaled $59 million, with a full-year total of $261 million. Looking ahead, the company anticipates capital expenditures in the range of $250 to $260 million for fiscal year 2026.

Fiscal Year 2026 Guidance

American Eagle provided an optimistic outlook for the upcoming fiscal year, projecting:

Comparable Sales: Expected to grow by mid-single digits.

Gross Margin: Anticipated to improve year-over-year.

SG&A Expenses: Expected to increase by 10% in the first quarter and mid-single digits for the fiscal year.

Operating Income: A forecast of $390 to $410 million for the fiscal year.

5. Conclusion

American Eagle Outfitters Inc. has showcased its strategic prowess and resilience in the retail market, especially given the challenges faced in previous years. With a solid foundation and a clear vision for growth, the company is poised to capitalize on its recent successes as it enters fiscal year 2026. Schottenstein's confidence in the company's strategic actions suggests a bright future for both American Eagle and its stakeholders.

Original press release