American Eagle Outfitters (AEO) Q2 2025 earnings summary

Executive summary

• Achieved record second quarter revenue of $1.3 billion, up 8% year-over-year, marking the sixth consecutive quarter of record revenue, with both American Eagle and Aerie delivering strong results.

• Operating income grew 55% year-over-year to $101 million, with operating margin expanding 240 basis points to 7.8%.

• Net income for Q2 was $77 million, up 59% from $49 million in Q2 2023; diluted EPS was $0.39, up from $0.25.

• Strategic focus on profitable growth, cost discipline, and operational efficiency continues to drive results.

• Updated full-year operating income outlook to $455–$465 million, at the high end of prior guidance.

Financial highlights

• Gross profit rose 10% to $499 million, with gross margin expanding 90 basis points to 38.6%.

• SG&A expense increased 4% to $345 million, but as a percentage of sales, declined 90 basis points to 26.7%.

• Store revenue rose 7% and digital revenue increased 12% year-over-year.

• Inventory increased 4% year-over-year to $664 million, with healthy inventory levels and a quarterly inventory turn of 1.18.

• CapEx was $61 million in Q2 and $97 million year-to-date; full-year CapEx expected at $200–$250 million.

Outlook and guidance

• Q3 operating income expected at $120–$125 million, reflecting a $20 million profit shift from Q3 to Q2 due to the retail calendar.

• Q3 comparable sales expected to grow 3–4%, with revenue flat to up slightly.

• Full-year operating income outlook raised to $455–$465 million, up 21–24% from last year.

• Full-year comparable sales growth expected at approximately 4%, with total revenue up 2–3%.

• SG&A expected to be leveraged for the year, with most benefit in Q4.