Q3 2025 American Eagle Outfitters Inc Earnings Call Transcript
Key Points
- American Eagle Outfitters Inc (AEO) delivered record revenue in the third quarter, with total revenue increasing 6% to $1.4 billion.
- Operating income of $113 million exceeded guidance, driven by higher-than-expected demand and well-controlled costs.
- Aerie and OFFLINE brands are generating exceptional growth, with Aerie's comps up 11% in the third quarter.
- The company made incremental investments in advertising, contributing to stronger demand and enhanced long-term brand awareness.
- American Eagle Outfitters Inc (AEO) is raising its fourth-quarter outlook due to strong performance across brands and channels, including a record Thanksgiving weekend.
- The company faced a net impact of approximately $20 million from tariffs in the third quarter.
- Gross margin declined by 40 basis points to 40.5% compared to the previous year.
- SG&A expenses increased by 10% due to investments in advertising, impacting overall profitability.
- American Eagle's women's business faced challenges with out-of-stocks in best-selling items, affecting overall performance.
- The company anticipates approximately $50 million in incremental tariff costs in the fourth quarter, which could impact future profitability.
Welcome to the AEO, Inc., third-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 and 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 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
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