Michael Nagel | Bloomberg | getty images
According to StreetAccount, the apparel company expects comparable sales to grow between 8% and 9% in the fiscal fourth quarter — nearly four times better than analysts’ estimate of 2.1%.
American Eagle now expects its full-year adjusted operating income to be between $303 million and $308 million — up from its previous range of $255 million to $265 million.
American Eagle shares rose as much as 15% in extended trading.
The company beat third-quarter expectations on both the top and bottom lines.
Here’s how American Eagle performed during the quarter compared to Wall Street expectations, based on a survey of LSEG analysts:
- earnings per share: 53 cents vs. 44 cents expected
- Income: $1.36 billion vs. $1.32 billion expected
The company’s net income for the three-month period ended Nov. 1 was $91.34 million, or 53 cents per share, compared with $80.02 million, or 41 cents per share, a year earlier.
Sales rose nearly 6% to $1.36 billion from $1.29 billion a year earlier.
The results are the first time investors are seeing the full quarterly impact of American Eagle’s stellar campaigns with Sidney Sweeney and Travis Kelce.
Companywide, American Eagle saw comparable sales rise 4%, better than the 2.7% analysts were expecting, according to StreetAccount. While the overall results of the business were above expectations, they were primarily driven by Erie, which saw comparable sales increase by 11% and revenue by nearly 13%.
At American Eagle, where the campaigns were concentrated, comparable sales rose just 1%, worse than analysts’ expectations of 2.1%, according to StreetAccount.
The company told CNBC that the campaigns are “attracting more customers” and drawing more attention around the brand, but the results show they have not yet been a major revenue driver.
However, these are not having any major impact on profits. During the quarter, American Eagle’s operating margin was 8.3%, better than analysts’ expectations of 7.5%, according to StreetAccount.
Beyond its marketing campaigns, American Eagle told CNBC that it saw record revenue in its third quarter and that this “strong momentum” continued into the current quarter, where it saw a “record-breaking Thanksgiving weekend.”
Pink holiday comment comes after peers’ likes Abercrombie & Fitch, Difference And Urban Outfitters The results beat fears ahead of the crucial holiday shopping season. Investors are keeping a close eye on discretionary retailers to see if the tariffs will dampen consumer demand, but many have proven resilient so far. They’re showing that for the time being, high prices aren’t stopping consumers from making purchases, as long as they feel they’re getting good value for their money.
The industrywide holiday outlook from outside consulting firms has been relatively vague, but discretionary retailers’ latest slate of earnings has been a positive omen for holiday sales. Also, according to the National Retail Federation, turnout was stronger than expected during the so-called Türkiye 5 shopping weekend, a five-day period between Thanksgiving and Cyber Monday.
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