Shares of American Eagle Outfitters (AEO -0.39%) 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%.
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.
AEO American Eagle Outfitters
NYSE · As of 4:00 PM ET 10/16/26
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."
