American Eagle Outfitters Inc., lifted by momentum at Aerie and Offline, saw an upswing in momentum in the back half of the year, leading to 10 percent sales gains for the fourth quarter.
“I am extremely pleased with the strong execution in the back half of the year, which reignited growth across our brands and channels,” Jay Schottenstein, executive chairman and chief executive officer, said Wednesday afternoon, following the company’s release of fourth-quarter and year-end financial results. “Building on the improved trends beginning last summer, we achieved a record fourth quarter and holiday period, with double-digit growth at Aerie and Offline and solid, positive performance at American Eagle.”
Total revenues for the fourth quarter ended Jan. 31, 2026 rose to $1.76 billion from $1.6 billion in the year-ago quarter. Total comparable sales increased 8 percent, on top of 3 percent comp growth last year.
Operating income declined to $95.8 million from $142.3 million a year ago, brought down by $84 million of impairment and restructuring charges related to the company’s exit from the Quiet Platform third-party logistics business, store impairments and general corporate restructuring.
Adjusted operating profit of $180 million increased 27 percent from $142 million last year. The adjusted operating margin of 10.2 percent expanded 130 basis points from 8.9 percent last year.
The gross margin of 37 percent declined 30 basis points from last year. The net tariff impact on the gross margin was $50 million, or 280 basis points. Increased markdowns were largely offset by leverage on positive sales combined with lower costs, favorable currency and operational efficiencies, the company indicated.
Net income declined to $83.6 million from $106.3 million. Diluted earnings per share of 50 cents, or 84 cents on an adjusted basis, compared with 54 cents a year earlier.
Schottenstein said that “compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter.”
The CEO also said that the first quarter of 2026 is “off to a good start.”
Fourth-quarter comparable sales at Aerie increased 23 percent after a 6 percent increase a year earlier. American Eagle comparable sales advanced 2 percent following 1 percent growth last year.
“Robust demand was broad-based across categories and channels, particularly active bottoms and double-digit growth in sports bras, tops and fashion bottoms,” the company indicated.
Positive results were driven by men’s, women’s tops and AE jeans, across genders. The men’s business delivered its third consecutive quarter of growth, with American Eagle Outfitters citing market share gains and an expanded customer base. Last year, American Eagle created more “culture-defining moments” via partnerships with Lamine Yamal, Ella Langley, Bailey Zimmerman and Stagecoach.
Investors were looking for something more and traded shares of the company down 3.7 percent to $21.61 in after-hours trading.
AEO is forecasting first-quarter comparable sales growth in the high single digits, with American Eagle comps in the positive low single digits, and Aerie/Offline comps in the double digits.
For all of 2026, AEO forecasts operating profit in the range of $390 million to $410 million, based on consolidated comparable sales growth in the midsingle digits.
“AEO finished 2025 strong with acceleration of sales growth profitability,” said Emarketer principal analyst Sky Canaves. “Aerie remains the standout thanks to consistent consumer demand, while the core American Eagle brand’s return to slight positive growth is a step in the right direction. But at some point Aerie’s growth numbers will flag on tough comps, adding to the pressure for the American Eagle brand to pick up momentum.
“The shifting tariff environment continues to present a major headwind for AEO and the U.S. apparel industry more broadly, and we can see the clear financial impact in AEO’s Q4 results with a significant drag on gross margins,” Canaves added. “Managing operating expenses and maintaining pricing will be critical to navigating the ongoing uncertainty in the tariff environment.“
