American Eagle Q1 Revenue Climbs 10% to $1.2 B, Stock Drops 10%
AEO•American Eagle Outfitters posted record Q1 net revenue of $1.2 billion, up 10% year-over-year, with diluted EPS of $0.14 versus a $0.36 loss a year earlier. American Eagle brand comp sales fell 2% while Aerie surged 25%, producing an 8% total comp gain and prompting a 10% after-hours stock decline.
1. Record Q1 Revenue and Earnings
American Eagle Outfitters delivered record Q1 net revenue of $1.2 billion, up 10% year-over-year, and reported diluted EPS of $0.14 versus a $0.36 per-share loss a year earlier. Operating profit improved to $28 million from an $85 million loss, reflecting stronger topline growth and cost controls.
2. Divergent Brand Sales Results
Comparable sales at the American Eagle label declined 2%, missing the 3.1% target, while Aerie achieved a 25% comp sales gain, surpassing the 19.1% projection. The American Eagle brand generated $678.5 million in revenue, and Aerie accounted for $480.8 million, highlighting the intimate apparel segment’s strength.
3. Inventory Build and Profit Impact
Ending inventory rose 27% to $817 million, driven by higher tariffs and a favorable comparison against a prior-year write-down, with unit counts up 5%. The inventory build may pressure turnover and margins if not managed in the coming quarters.
4. Outlook and Store Fleet Plan
Management guided for mid-to-high single-digit Q2 comparable sales growth and operating income of $45 million to $50 million, maintaining full-year operating income targets of $390 million to $410 million. The company plans to close 25 American Eagle locations in 2026, offset by 40 openings under its Aerie and Offline banners.
