Q2 2025 American Eagle Outfitters Inc Earnings Call Transcript
Key Points
- American Eagle Outfitters Inc (AEO) reported total revenue of $1.28 billion, marking their second highest ever for the second quarter.
- Aerie saw a dramatic turnaround with a 3% comp growth, achieving record second quarter revenue.
- Operating income improved by 2% to $103 million, significantly exceeding expectations.
- The company successfully managed through the season with better sell-throughs and less promotions, leading to a gross margin increase to 38.9%.
- The marketing campaigns with Sydney Sweeney and Travis Kelce generated significant buzz, resulting in a record-breaking new customer acquisition and 40 billion impressions.
- Consolidated revenue declined by 1% compared to last year, with comparable sales also decreasing by 1%.
- The company faced challenges with shorts as a seasonal category, impacting both Aerie and American Eagle brands.
- Tariff impacts are expected to pressure gross margins in the second half, with $20 million in Q3 and $40-$50 million in Q4.
- SG&A expenses are expected to increase in the high single digits in Q3, driven by investments in advertising.
- The company anticipates closing 35 to 40 American Eagle locations by year-end, reflecting ongoing adjustments in their store fleet.
Welcome to the AEO Inc. second-quarter 2025 earnings conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Judy Meehan, Head of Investor Relations and Corporate Communications. Please go ahead.
Good afternoon, everyone. Joining me today for our prepared remarks are Jay Schottenstein, Executive Chairman and Chief Executive Officer; Jen Foyle, President, Executive Creative Director for American Eagle and Aerie, and Mike Mathias, Chief Financial Officer.
Before we begin today's call, I need to remind you that we will make certain forward-looking statements. These statements are based upon information that represents the company's current expectations or beliefs. The results actually realized may differ materially based on risk factors included in our SEC filings.
The company undertakes no obligation to publicly update or revise any forward-looking statements
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