American Eagle Outfitters Inc. (NYSE:AEO) raised its fiscal fourth-quarter operating income outlook Monday, citing robust holiday demand and improved margins.
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The retailer said comparable sales through Jan. 3 rose in the high single digits, with strength across brands and channels. American Eagle delivered low single-digit comparable growth, while Aerie comps increased in the low 20s.
Capitalizing on strong results, management raised its fourth-quarter operating income guidance to $167 million to $170 million, surpassing the earlier range of $155 million to $160 million. The company now projects consolidated comparable sales growth of 8% to 9%, fueled by disciplined margin execution.
Despite the improved outlook, the updated forecast still includes roughly $50 million in pressure tied to tariffs, consistent with earlier disclosures.
CEO Jay Schottenstein credited record December results to strong demand for new collections, effective marketing and post-holiday momentum. He named Aerie and Offline as growth leaders, with American Eagle showing sequential improvement.
“Momentum continued in the fourth quarter with record December sales fueled by the power of our brands, with particularly strong growth at Aerie and Offline and sequential growth at American Eagle.”
Reflecting this robust holiday momentum, the company has also drawn investor attention, highlighted by the recent move in which the stock smashed 52-week highs amid upbeat sentiment around the quarter.
Peer And ETF Lens: Investors tracking apparel demand often compare results with Abercrombie & Fitch Co. (NYSE:ANF) and Gap Inc. (NYSE:GPS). Retail exposure is commonly followed through the SPDR S&P Retail ETF (NYSE:XRT) and the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY).
AEO Price Action: AEO shares are trading 5.22% lower at $25.42 at publication on Monday.
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