Q1 2026 American Eagle Outfitters Inc Earnings Call Transcript
Key Points
- American Eagle Outfitters Inc (AEO) reported a 10% increase in revenue, reaching $1.2 billion, with operating income of $28 million, surpassing guidance.
- Aerie achieved exceptional growth, with revenue up 34% year-over-year, and surpassed $2 billion on a trailing 12-month basis.
- The company successfully transitioned to high-margin commercial strategies, improving average unit retail (AUR) and product margins.
- The opening of a new distribution center in Phoenix is expected to optimize the distribution network and improve inventory placement.
- Aerie's strong customer engagement and brand awareness have been bolstered by successful marketing campaigns, including the 100% Aerie Real campaign.
- American Eagle's performance was mixed, with a 2% decline in total sales and comparable sales, primarily due to underperformance in women's bottoms.
- The company faces macroeconomic uncertainties and tariff impacts, with tariffs expected to be a headwind in the second quarter.
- SG&A expenses increased by 11% due to planned investments in advertising, impacting overall profitability.
- The retail environment remains competitive, requiring continued discipline and innovation to sustain growth.
- Inventory costs increased by 27%, partly due to incremental tariffs and last year's inventory write-down.
Good afternoon, everyone. Welcome to AEO Inc first quarter 2026 earnings conference call.
(Operator Instructions)
Please note this event is being recorded. I would now like to turn the conference over to Alexis Tragos, Vice President, 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 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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