American Eagle Outfitters (AEO) Q3 2026 earnings summary

Executive summary

• Third quarter revenue reached a record $1.4 billion, up 6% year-over-year, with Aerie delivering 11–12% comparable sales growth and American Eagle up 1–3%.

• Operating income was $113 million, up 6% year-over-year and exceeding guidance, with diluted EPS of $0.53, a 10–29% increase year-over-year.

• Strong digital channel and marketing campaigns drove customer acquisition and loyalty, with over a million new loyalty members.

• Share repurchases totaled $231 million year-to-date, reducing diluted shares outstanding by 12%; dividends paid totaled $64 million.

• Robust holiday momentum continued into Q4, with a record-breaking Thanksgiving weekend and strong start to the season.

Financial highlights

• Gross profit rose 5% to $552 million, with gross margin at 40.5%, down 40 basis points year-over-year due to $20 million in tariff costs.

• SG&A expense increased 10% from higher advertising investment; net income for the quarter was $91 million, up 14% year-over-year.

• CapEx for Q3 was $70 million; year-to-date $202 million, with full-year guidance at $275 million.

• Inventory ended up 11% at $891 million, reflecting higher demand and new store openings.

• Cash and cash equivalents at quarter-end were $113 million, with total liquidity of $560 million and $210 million in outstanding borrowings.

Outlook and guidance

• Q4 comp sales expected to grow 8–9%, with Aerie in the high teens and AE in low to mid-single digits; full-year comp sales projected up low single digits.

• Q4 operating income guidance raised to $155–$160 million, including $50 million in incremental tariff costs; full-year adjusted operating income expected at $303–$308 million.

• SG&A to increase low to mid-single digits, mainly from advertising; tax rate estimated at 28%.

• CapEx to remain elevated due to store investments, IT, e-commerce, and design center relocation.

• Management expects sufficient liquidity to fund operations and capital needs for the next twelve months and beyond.