American Eagle Outfitters (AEO) Q1 2026 earnings summary

Executive summary

• First quarter 2025 was challenging, with a 5% revenue decline to $1.09–$1.1 billion, a $68 million adjusted operating loss, and a $75 million inventory write-down due to margin pressure and excess inventory.

• Comparable sales declined 3% overall, with American Eagle comps down 2% and Aerie down 4%; traffic was up, but lower AURs and conversion drove comp pressure.

• Diluted loss per share was $(0.36); adjusted diluted loss per share was $(0.29).

• Management is focused on correcting execution issues, improving inventory alignment, and implementing more rigorous buying processes.

• Core brands remain resilient, with American Eagle ranked #1 in jeans and Aerie #3 in intimates in the U.S.

Financial highlights

• Gross profit was $322 million, with gross margin at 29.6%, down from 40.6% last year, mainly due to inventory write-downs and higher markdowns.

• Adjusted operating loss was $68 million; GAAP operating loss was $85 million.

• SG&A expense rose 2% to $339 million, representing 31.1% of revenue.

• Cash and cash equivalents were $87.9–$88 million as of quarter-end.

• Inventory ended down 5% year-over-year, better aligned to sales trends after writedowns.

Outlook and guidance

• Q2 2025 guidance: revenue down 5%, comparable sales down 3%, operating income $40–$45 million, gross margin to remain pressured, and SG&A dollars flat.

• Full-year 2025 guidance remains withdrawn due to macro uncertainty and ongoing management review.

• CapEx for the year reduced to $275 million, with flexibility in inventory buys and focus on expansion, IT, e-commerce, and supply chain.