AEO Inc. Reports Second Quarter Fiscal 2026 Results

About this update from American Eagle Outfitters, Inc.

American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the second quarter ended August 1, 2026. “The second quarter reflects the value of our AEO Inc. portfolio, led by the broad-based momentum of Aerie and OFFLINE, alongside encouraging progress at American Eagle. We continue to expand Aerie's reach and deepen brand awareness, leveraging authentic connections to attract new customers and fuel engagement. AE saw sequential improvement from the first quarter, including the fourth consecutive quarter of growth in men’s, and we remain focused on opportunities to drive greater consistency in the women’s business,” commented Jay Schottenstein, Executive Chairman of the Board and Chief Executive Officer - AEO Inc. “Looking ahead to the second half, we are committed to building on the continued momentum in Aerie and OFFLINE, accelerating improvement at American Eagle, and unlocking greater consistency and profitability across the business,” he concluded. Second Quarter 2026 Results: Total net revenue of $1.38 billion increased 8% to last year. Total comparable sales increased 6%. Aerie comparable sales grew 19%. American Eagle comparable sales decreased 1%. Gross profit of $672 million rose 34% from $500 million last year and gross margin of 48.7% expanded 980 basis points. Included in gross profit this quarter is a net benefit of $179 million related to tariff refunds, which drove 1300 basis points of the gross margin expansion. Merchandise margins deleveraged 330 basis points, with margin rate improvement in Aerie offset by American Eagle. Selling, general and administrative (SG&A) expenses of $408 million increased 19% and 290 basis points to a rate of 29.6%. Included in SG&A this quarter is $18 million, or 130 basis points, of tariff refund related incentive compensation expense, partially offset by tariff refunds received. The remaining increase was primarily driven by planned investments in advertising. Operating profit was $211 million compared to $103 million last year. Operating margin of 15.3% compared to 8.0% last year. Included in operating profit this quarter is a net benefit of $161 million related to tariff refunds, which drove 1170 basis points of the operating margin expansion. Other income of $14 million included a $12 million gain on equity method investments. Interest expense of $47 million increased due to an agreement related to the sale of certain tariff refund claims. Diluted earnings per share of $0.79 compared to $0.45 last year. Average diluted shares outstanding were 170 million. Inventory Consolidated inventory at cost was up 14%, with units up 9%. The increase in cost includes the impact of incremental tariffs this year. Unit inventory plans will continue to be rebalanced between brands and categories for the remainder of the year. Tariff Refunds During the second quarter, the company received International Emergency Economic Powers Act (IEEPA) tariff refunds of $196 million, including interest. These tariff refunds benefitted the company’s second quarter 2026 results. Accordingly, the company accrued incremental incentive compensation of $35 million in the quarter, which impacted both gross profit and SG&A expenses. The net operating income benefit of tariff refunds was $161 million for the second quarter 2026. The company has received substantially all of the tariff refunds for which it submitted refund claims. Additionally, during the second quarter, the company recorded interest expense of $45 million related to an agreement with a third-party buyer for the sale of certain tariff refund claims entered into during the prior fiscal year. Shareholder Returns During the second quarter, the company returned $21 million to shareholders via a quarterly cash dividend of $0.125 per share, paid to shareholders of record as of July 10, 2026. Capital Expenditures Capital expenditures totaled $66 million in the second quarter. The company expects 2026 capital expenditures to be in the range of $250 to $260 million. Outlook All guidance is based on estimates and includes the impact of IEEPA tariff refunds.   Third Quarter 2026 Outlook Fiscal Year 2026 Outlook Comparable Sales +Mid-to-High Single Digits +Mid Single Digits Gross Margin Flat YoY Up YoY SG&A +High-Single Digits +Low-Double Digits Depreciation and Amortization $55 M Approximately $215 M Operating Income $110 M to $115 M $540 M to $550 M Weighted Average Share Count Low 170 millions Low 170 millions Webcast and Supplemental Financial Information Management will host a conference call today at 4:30 p.m. Eastern Time. To access the live webcast and audio replay, please click here . Additionally, a financial results presentation is posted in the Investor Relations section on AEO’s website, www.aeo-inc.com . About American Eagle Outfitters, Inc. American Eagle Outfitters, Inc. (NYSE: AEO) is a leading global specialty retailer with a portfolio of beloved apparel brands including American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder and Unsubscribed. Rooted in optimism, inclusivity and authenticity, AEO’s brands empower every customer to celebrate their unique personal style by offering casual, comfortable, timeless outfitting and high-quality products that are made to last. AEO Inc. operates stores in the United States, Canada and Mexico, with merchandise available in more than 30 countries through a global network of license partners. Additionally, the company operates a robust e-commerce business across its brands. For more information, visit aeo-inc.com. SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This release and related statements by management contain “forward-looking statements” (as such term is defined in the Private Securities Litigation Reform Act of 1995), which represent management’s views, expectations, beliefs, assumptions and estimates concerning future events, including, without limitation, expected results for the third quarter and full-year fiscal 2026. All statements other than statements of historical facts contained in this release and related statements by management are forward-looking statements. Words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may, "outlook, "plan," "potential," "project," "should," "target," "will," or "would" or the negative of these terms or other similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements made by the company are inherently uncertain because they are based on assumptions and expectations concerning future events and are subject to change based on many important factors, some of which may be beyond the company’s control. You are cautioned to not unduly rely upon these statements. Any forward-looking statement speaks only as of the date on which such statement is made, and except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Because these forward-looking statements involve known and unknown risks and uncertainties, the following important factors, in addition to the risks disclosed in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 and in any other filings that we have made or may in the future make with the Securities and Exchange Commission, in some cases have affected, and in the future could affect, the company's financial performance and could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements included in this release or otherwise made by management: the risk that the company’s operating, financial and capital plans may not be achieved; our inability to anticipate fluctuations in customer demand and respond to changing consumer preferences and fashion trends and to manage our inventory commensurately; the seasonality of our business; our inability to achieve planned store financial performance and gain market share in the face of declining shopping center traffic or attract customers to our stores; our inability to react to raw material cost, labor and energy cost increases; our inability to respond to changes in e-commerce and leverage omni-channel capabilities; our inability to execute on our key business priorities; our inability to expand internationally; difficulty with our international merchandise sourcing strategies; the impact that foreign trade issues, including import tariffs and other trade restrictions imposed by the U.S., China or other countries have had, and may continue to have, on our product costs, as well as continued uncertainty with respect to tariffs and other trade restrictions, the possibility that product costs may be affected by other foreign trade issues, such as the availability of further tariff refunds, currency exchange rate fluctuations, increasing prices for raw materials, supply chain issues, the potential for a trade war, political instability or other reasons; challenges with information technology systems, including safeguarding against security breaches; changes to U.S. or other countries' trade policies and tariff and import/export regulations, and global economic, public health, social, political and financial conditions, and the resulting impact on consumer confidence and consumer spending, as well as other changes in consumer discretionary spending habits, which could have a material adverse effect on our business, results of operations and liquidity. In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. The use of the “company,” “AEO,” “we,” "us," and “our” in this release refers to American Eagle Outfitters, Inc.   AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) August 1, 2026 August 2, 2025 Assets Current assets: Cash and cash equivalents $ 147,954   $ 126,780   Merchandise inventory   817,910     718,337   Accounts receivable, net   245,231     237,355   Prepaid expenses   103,331     167,295   Other current assets   22,257     21,335   Total current assets   1,336,683     1,271,102   Operating lease right-of-use assets   1,646,845     1,604,457   Property and equipment, at cost, net of accumulated depreciation   814,979     773,872   Goodwill, net   225,181     225,231   Non-current deferred income taxes   93,664     48,322   Intangible assets, net   35,974     40,674   Other assets   125,495     97,374   Total assets $ 4,278,821   $ 4,061,032   Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 253,663   $ 247,578   Current portion of operating lease liabilities   309,108     321,334   Accrued compensation and payroll taxes   94,629     49,534   Unredeemed gift cards and gift certificates   62,837     57,376   Accrued income and other taxes   29,084     30,631   Other current liabilities and accrued expenses   90,067     76,932   Total current liabilities   839,388     783,385   Non-current liabilities: Non-current operating lease liabilities   1,556,639     1,473,119   Long-term debt, net   55,000     203,000   Other non-current liabilities   65,479     56,918   Total non-current liabilities   1,677,118     1,733,037   Stockholders’ equity:         Preferred stock   —     —   Common stock   2,496     2,496   Contributed capital   360,833     369,478   Accumulated other comprehensive loss   (16,357 )   (34,646 ) Retained earnings   2,678,371     2,416,980   Treasury stock   (1,261,525 )   (1,213,046 ) Total AEO stockholders' equity   1,763,818     1,541,262   Non-controlling interests   (1,503 )   3,348   Total stockholders’ equity $ 1,762,315   $ 1,544,610   Total liabilities and stockholders’ equity $ 4,278,821   $ 4,061,032     Current Ratio   1.59     1.62       AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited; Dollars and shares in thousands, except per share amounts) 13 weeks ended August 1, 2026 August 2, 2025 (In thousands) (Percentage of revenue) (In thousands) (Percentage of revenue) Total net revenue $ 1,380,375   100.0   % $ 1,283,675 100.0 % Cost of sales, including certain buying, occupancy and warehouse expenses   708,311   51.3     783,713 61.1 Gross profit   672,064   48.7     499,962 38.9 Selling, general and administrative expenses   408,354   29.6     342,211 26.7 Depreciation and amortization expense   52,305   3.8     54,666 4.2 Operating income $ 211,405   15.3   $ 103,085 8.0 Interest expense, net   47,125   3.4     1,919 0.1 Other (income) loss, net   (13,771 ) (1.0 )   648 0.1 Income before income taxes $ 178,051   12.9   $ 100,518 7.8 Provision for income taxes   44,366   3.2     23,705 1.8 Net income $ 133,685   9.7   $ 76,813 6.0 Net loss attributable to non-controlling interests   399   0.0     820 0.0 Net income attributable to AEO $ 134,084   9.7   % $ 77,633 6.0 %   Basic net income per common share attributable to AEO $ 0.80   $ 0.45 Diluted net income per common share attributable to AEO $ 0.79   $ 0.45   Weighted average common shares outstanding - basic   167,059     170,756 Weighted average common shares outstanding - diluted   170,180     171,659   AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited; Dollars and shares in thousands, except per share amounts) 26 weeks ended August 1, 2026 August 2, 2025 (In thousands) (Percentage of revenue) (In thousands) (Percentage of revenue) Total net revenue $ 2,575,660   100.0   % $ 2,373,275 100.0   % Cost of sales, including certain buying, occupancy and warehouse expenses   1,447,425   56.2     1,550,892 65.3   Gross profit   1,128,235   43.8     822,383 34.7   Selling, general and administrative expenses   784,846   30.5     680,998 28.7   Impairment and restructuring charges   —   0.0     17,119 0.7   Depreciation and amortization expense   103,760   4.0     106,363 4.5   Operating income $ 239,629   9.3   $ 17,903 0.8   Interest expense, net   54,978   2.1     1,700 0.1   Other (income) loss, net   (20,993 ) (0.8 )   816 (0.0 ) Income before income taxes $ 205,644   8.0   $ 15,387 0.7   Provision for income taxes   49,024   1.9     3,992 0.2   Net income $ 156,620   6.1   $ 11,395 0.5   Net loss attributable to non-controlling interests   987   0.0     1,339 0.0   Net income attributable to AEO $ 157,607   6.1   % $ 12,734 0.5   %   Basic net income per common share attributable to AEO $ 0.94   $ 0.07 Diluted net income per common share attributable to AEO $ 0.92   $ 0.07   Weighted average common shares outstanding - basic   167,447     175,156 Weighted average common shares outstanding - diluted   171,277     176,482 AMERICAN EAGLE OUTFITTERS, INC. NET REVENUE BY SEGMENT (Unaudited; Dollars in thousands) 13 weeks ended 26 weeks ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Net Revenue: American Eagle $ 805,883 $ 800,406   $ 1,484,359 $ 1,494,271   Aerie   535,822   429,084     1,016,648   788,872   Other   38,670   61,523     74,653   105,494   Intersegment Elimination   —   (7,338 )   —   (15,362 ) Total Net Revenue $ 1,380,375 $ 1,283,675   $ 2,575,660 $ 2,373,275   AMERICAN EAGLE OUTFITTERS, INC. STORE INFORMATION (Unaudited) 13 weeks ended 26 weeks ended August 1, 2026 August 1, 2026 Consolidated stores at beginning of period 1,170   1,168   Consolidated stores opened during the period AE Brand (1) —   3   Aerie (incl. OFFL/NE) (2) 2   5   Consolidated stores closed during the period AE Brand (1) (2 ) (6 ) Aerie (incl. OFFL/NE) (2) (2 ) (2 ) Unsubscribed (1 ) (1 ) Total consolidated stores at end of period 1,167   1,167     Stores by Brand AE Brand (1) 802   Aerie (incl. OFFL/NE) (2) 335   Todd Snyder 23   Unsubscribed 7   Total consolidated stores at end of period 1,167     Total gross square footage at end of period (in '000) 7,260     International license locations at end of period (3) 376     (1) AE Brand includes AE stand alone locations, AE/Aerie side-by side locations, AE/OFFL/NE side-by-side locations, and AE/Aerie/OFFL/NE side-by-side locations. (2) Aerie (incl. OFFL/NE) includes Aerie stand alone locations, OFFL/NE stand alone locations, and Aerie/OFFL/NE side-by-side locations. (3) International license locations (retail stores and concessions) are not included in the consolidated store data or the total gross square footage calculation.   View source version on businesswire.com: https://www.businesswire.com/news/home/20260909455623/en/

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