American Eagle Outfitters (AEO) has reported total net revenue of $1.28bn for the second quarter (Q2) of 2025 (FY25) – a 1% decline compared to the previous year.
The company experienced a similar 1% decrease in total comparable sales.
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Gross profit stood at $500m, with gross margin improving slightly by 30 basis points from the previous year to 38.9%. This increase was primarily due to a rise in merchandise margins by 50 basis points, attributed to reduced markdowns.
The company’s selling, general and administrative expenses amounted to $342m, showing a 1% reduction from the previous year and remaining consistent as a percentage of sales. This was partly due to lower compensation costs following recent expense restructuring efforts, which were somewhat balanced out by higher advertising investments.
Operating profit for the quarter saw an increase of 2% from the previous year, reaching $103m. The operating margin also expanded by 20 basis points to 8%.
Earnings per diluted share improved 15% to $0.45.
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By GlobalDataBreaking down performance by brand, Aerie’s comparable sales increased by 3%, while American Eagle’s comparable sales fell by 3%.
AEO executive chairman of the board and chief executive officer Jay Schottenstein stated: “We were pleased to see an improvement in the business during the second quarter, driven by higher demand, lower promotions and well-managed expenses, all of which exceeded our expectations.
“The actions we have taken to better align inventory and strengthen execution laid the groundwork for our results this quarter. Highlighted by Aerie’s top-line increase and better sell-throughs overall, we achieved our second highest enterprise revenues ever recorded for the second quarter.”
American Eagle Outfitters provided guidance for fiscal year 2025, stating that this includes expected impacts from current trade tariffs.
The company anticipates comparable sales to be roughly flat and projects a year-on-year decline in gross margin.
Adjusted operating income is forecast between $255m and $265m, which excludes first-quarter impairment and restructuring charges totalling $17m.
Schottenstein concluded: “The fall season is off to a positive start. Fuelled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales. We look forward to building on our progress and the continued strength of our iconic brands to drive higher profitability, long-term growth and shareholder value.”
