American Eagle Outfitters (AEO.N) raised its annual comparable sales forecast above Wall Street estimates, driven by marketing campaigns featuring Sydney Sweeney and Travis Kelce 1.
The retailer’s upbeat guidance signals that celebrity partnerships and targeted holiday campaigns are driving consumer demand despite broader retail sector headwinds.
Key Takeaways
- Annual comparable sales now expected to grow in low single digits
- Q4 comparable sales guidance raised to 8-9% from low single digits
- Celebrity marketing campaigns with Sweeney and Kelce boosting demand
Market reaction & context
American Eagle shares surged 11% in after-hours trading following the announcement 2. The company now expects annual comparable sales to rise in the low single digits, compared to previous expectations of flat growth.
The retailer’s performance contrasts with broader retail sector struggles, as many apparel companies face pressure from inflation and reduced consumer discretionary spending.
Strong third-quarter performance
American Eagle reported third-quarter revenue of $1.36 billion, up 6% year-over-year, with total comparable sales increasing 4% 3. The Aerie brand delivered standout performance with comparable sales growth of 11%, while the core American Eagle brand posted 1% growth.
Third-quarter adjusted earnings per share of $0.53 beat analyst estimates of $0.44, demonstrating the company’s ability to convert sales growth into profit.
Celebrity marketing drives momentum
The company’s “Great Jeans” campaign featuring actress Sydney Sweeney and partnerships with NFL player Travis Kelce’s brand Tru Kolors have significantly boosted brand engagement 4. Additional collaborations with tennis player Coco Gauff and actress Jenna Ortega have expanded the company’s reach across demographic segments.
“I’m extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations,” said Jay Schottenstein, Executive Chairman and CEO 5.
Holiday outlook and operational challenges
For the fourth quarter, American Eagle expects comparable sales to grow between 8% and 9%, well above analyst estimates of 2.2% growth. The company raised its fourth-quarter operating income guidance to $155-160 million from previous expectations of $125-130 million.
However, the retailer faces headwinds from tariffs, expecting a $50 million impact in the fourth quarter and approximately $70 million for the full fiscal year 2025 6.
Brand performance analysis
Market analysts noted divergent performance between American Eagle’s brands. “The results speak clearly to a tale of two brands,” said eMarketer analyst Sky Canaves, highlighting Aerie’s momentum versus the flagship brand’s modest gains 7.
Aerie’s success stems from its affordable mix of loungewear, intimates and activewear that appeals to value-conscious young shoppers, while the namesake brand continues to benefit from aggressive marketing investments.
Financial position and shareholder returns
The company completed $231 million in share repurchases year-to-date and returned $64 million to shareholders through dividends. American Eagle maintains a strong balance sheet with total ending inventory of $891 million, up 11% to support increasing demand and new store openings.
Capital expenditures totaled $202 million through the third quarter, with full-year expectations of approximately $275 million focused on store improvements and technology upgrades.
Not investment advice. For informational purposes only.
References
1Neil J Kanatt (December 2, 2025). “American Eagle lifts annual sales forecast on marketing-driven holiday demand”. Reuters. Retrieved March 4, 2026.
2Reuters (December 3, 2025). “American Eagle shares jump as celebrity campaigns to bolster holiday demand”. Reuters. Retrieved March 4, 2026.
3American Eagle Outfitters (December 2, 2025). “AEO Inc. Reports Third Quarter Fiscal 2025 Results Exceeding Expectations; Raises Fourth Quarter Outlook”. AEO Investor Relations. Retrieved March 4, 2026.
4Alpha Spread (December 2, 2025). “American Eagle Outfitters Beats Expectations and Raises Sales Forecast Amid Strong Holiday Outlook”. Alpha Spread. Retrieved March 4, 2026.
5AEO Inc (January 12, 2026). “American Eagle Outfitters Reports Record Holiday Sales”. AEO Inc. Retrieved March 4, 2026.
6InsiderFinance (December 2, 2025). “American Eagle Earnings Beat, Raises Holiday Outlook”. InsiderFinance. Retrieved March 4, 2026.
7SRN News (December 2, 2025). “American Eagle lifts sales forecast on holiday demand, marketing campaigns”. SRN News. Retrieved March 4, 2026.