American Eagle Outfitters - AEO Inc. Reports Second Quarter Fiscal 2026 Results

About this update from American Eagle Outfitters, Inc.

PITTSBURGH- American Eagle Outfitters, Inc. (NYSE: AEO) today announced financial results for the second quarter ended August 1, 2026 . * Record revenue increases to $1.4 billion with total comparable sales up 6% * Aerie and OFFLINE total revenue grew 25% - including 19% comparable sales growth * Updates fiscal 2026 operating income guidance in the range of $540 to $550 million , inclusive of net tariff refund benefit '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: See full release at: https://investors.ae.com/press-releases/news-details/2026/AEO-Inc--Reports-Second-Quarter-Fiscal-2026-Results/default.aspx (C) 2026 Electronic News Publishing, source ENP Newswire

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