American Eagle Q4 Revenue Rises 10% to $1.8B; Operating Income Up 27%
American Eagle Outfitters posted Q4 revenue of $1.8 billion, up 10% year-over-year, with comps growth of 8% (23% at Aerie; 2% at AE) and adjusted operating income rising 27% to $180 million. Gross margin slipped 30 basis points to 37% due to tariff pressures, and the company expects H1 2026 tariff headwinds.
1. Q4 Financial Results
American Eagle Outfitters delivered record Q4 revenue of $1.8 billion, a 10% increase year-over-year. Adjusted operating income rose 27% to $180 million, while gross profit reached $651 million, up 9%. SG&A expenses were $418 million, a 4% increase, improving leverage by 120 basis points.
2. Brand Performance
Comparable sales grew 8% overall, driven by Aerie’s 23% comp increase versus 2% at American Eagle. Inventory costs rose 10% with units up 3%, prompting higher markdowns in AE jeans and slower demand in women’s dresses and non-denim bottoms.
3. Tariff Pressures and Outlook
Gross margin contracted 30 basis points to 37% as tariff headwinds weighed on costs. The company anticipates continued tariff impacts on operating income in H1 2026, with mid- to high-30% gross margins in Q1 and a slight dip in Q2 before anniversary benefits.
4. Capital Returns and Store Strategy
Cash on hand stood at $239 million at year-end, with $341 million returned to shareholders via buybacks and dividends. CapEx totaled $59 million in Q4 ($260 million for the year), while plans include opening 35 new Aerie/Offline stores and closing 25–30 AE locations in 2026.