American Eagle Outfitters (AEO) Q2 2026 earnings summary

Executive summary

• Second quarter revenue was $1.28 billion, the second highest ever for Q2, with operating income up 2% to $103 million and diluted EPS up 15% to $0.45 year-over-year.

• Stronger demand, lower promotional activity, and disciplined expense management led to margin stabilization and results above expectations.

• Aerie delivered 3% comparable sales growth and record Q2 revenue, while American Eagle comps declined 3% but saw improved demand in key categories.

• Key marketing campaigns drove record new customer acquisition, 40 billion impressions, and strong brand momentum.

• Year-to-date share repurchases totaled $231 million, reducing outstanding shares by 10% and supporting EPS growth.

Financial highlights

• Total net revenue for Q2 was $1.28 billion, down 1% year-over-year; comparable sales decreased 1%.

• Gross profit was $500 million, with a gross margin of 38.9%, up 30 basis points year-over-year.

• Operating income for the quarter was $103 million (8.0% of revenue); net income was $77.6 million, with net margin at 6.0%.

• SG&A expenses were $342 million, down 1% year-over-year and flat as a rate of sales.

• Inventory increased 8% to $718 million, mainly due to tariffs.

Outlook and guidance

• Q3 and Q4 comparable sales expected up low single digits; Q3 operating income guidance: $95–$100 million, Q4: $125–$130 million.

• Full-year adjusted operating income guidance is $255–$265 million, excluding $17 million in Q1 impairment and restructuring charges.

• SG&A expected to increase high single digits in Q3 (mainly advertising), but flat or slightly down in Q4.

• CapEx for Q2 was $71 million, with year-to-date spend at $133 million; full-year CapEx expected at $275 million.

• Tax rate expected at approximately 25% for the remainder of the year.