American Eagle Outfitters sees flat gross margin, higher costs in Q3 after tariff-boosted quarter

American Eagle Outfitters

09/09/2026 21:17

Overview
US apparel retailer's fiscal Q2 revenue rose 8%, slightly beating analyst expectations
EPS for fiscal Q2 rose to $0.79, boosted by tariff refund benefit
Aerie and OFFLINE revenue grew 25%, while American Eagle comparable sales fell 1%

Outlook
Company sees Q3 comparable sales rising mid-to-high single digits
American Eagle Outfitters expects full-year operating income of $540 mln to $550 mln
Company expects full-year comparable sales to increase mid-single digits
Q3 gross margin guided flat YoY, with SG&A up high-single digits, signaling less tariff-related tailwind ahead 

Result Drivers
TARIFF REFUNDS - Net benefit from tariff refunds significantly boosted gross profit and operating income in Q2
AERIE AND OFFLINE GROWTH - Strong performance at Aerie and OFFLINE drove overall revenue and comparable sales growth
AMERICAN EAGLE BRAND SOFTNESS - American Eagle comparable sales declined 1%, with improvement in men's offset by weakness in women's

Company press release: ID:nBwbJmTYBa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Slight Beat*
$1.38 bln
$1.37 bln (13 Analysts)
Q2 EPS
 
$0.79
 
Q2 Net Income
 
$133.69 mln
 
Q2 Total Comparable Sales Growth
 
6.00%
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 14 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the apparel & accessories retailers peer group is "buy."
Wall Street's median 12-month price target for American Eagle Outfitters, Inc. is $18.00, about 4.5% above its September 8 closing price of $17.22
The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads
Sept 9 - Women's apparel retailer J.Jill beats Q2 profit on tariff refund
Sept 9 - Footwear retailer Caleres' Q2 sales beat estimates on gains across brands
Sept 9 - Academy Sports and Outdoors' Q2 adj EPS beats estimates, outlook raised

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)