American Eagle stock jumps as it expects a big holiday, raises forecast after Sydney Sweeney ads
American Eagle Outfitters delivered a bullish update Tuesday, significantly raising its full-year guidance after reporting better-than-expected third-quarter results, signaling strong consumer momentum heading into the crucial holiday season.
The apparel retailer now expects fiscal fourth-quarter comparable sales to grow 8% to 9%, far surpassing analyst estimates of 2.1%. For the full year, adjusted operating income is projected between $303 million and $308 million, up from a prior range of $255 million to $265 million. The optimistic outlook sent shares surging 15% in extended trading.
Quarterly Performance Highlights
For the quarter ended November 1, American Eagle posted earnings per share of 53 cents, beating the expected 44 cents, while revenue reached $1.36 billion, above the $1.32 billion forecast. Net income rose to $91.34 million from $80.02 million a year earlier.
Growth was driven primarily by the Aerie brand, where comparable sales jumped 11% and revenue increased about 13%. The core American Eagle brand saw a more modest 1% rise in comparable sales, slightly below expectations, indicating that high-profile marketing campaigns featuring Sydney Sweeney and Travis Kelce have boosted brand attention but not yet translated into major revenue gains.
Holiday Momentum and Industry Context
The company reported a “record-breaking Thanksgiving weekend” and sustained strong momentum into the current quarter. This positive commentary aligns with better-than-feared results from peers like Abercrombie & Fitch, Gap, and Urban Outfitters, suggesting consumer resilience despite tariff-related price pressures.
The National Retail Federation noted stronger-than-expected turnout during the key "Turkey 5" shopping period, reinforcing optimism for the holiday season. American Eagle's performance underscores that value-conscious consumers continue to spend when they perceive strong quality for price, even in a challenging economic climate.
