American Eagle Outfitters (AEO) increased its fiscal fourth‑quarter operating‑income guidance to $167 million through $170 million, up from the prior range of $155 million to $160 million. The company said the upgrade reflects solid margin performance and the ability to manage cost pressures, even as it expects roughly $50 million in tariff‑related cost drag for the quarter.
Comparable sales through Saturday, January 3, 2026, rose in the high single digits. The core American Eagle brand grew in the low single digits, while the Aerie brand posted comparable sales growth in the low twenties. The stronger performance was driven by robust demand across both brands and all channels, with a record December sales period that lifted the overall quarter.
Management explained that the record holiday sales and the guidance increase are a result of a favorable product mix and pricing power. Aerie’s strong growth, driven by its “body‑positive” positioning and digital marketing campaigns, helped offset the modest growth in the core brand. The company also highlighted disciplined cost management, which helped maintain operating margins despite the $50 million tariff headwind.
The company’s guidance signals confidence in continued momentum through the holiday season and into the new year. Analysts noted that the raised outlook, combined with a high‑teens operating profit growth projection for FY2026, suggests that AEO is on track to exceed prior expectations and that its strategic focus on the Aerie brand is paying off.
Market reaction to the announcement was muted, with investors focusing on the tariff‑related cost drag. Despite the upbeat results, the company’s guidance still reflects the ongoing impact of U.S. import tariffs on its cost structure, which remains a key headwind for the business.
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