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American Eagle Outfitters, Inc. AEO is expected to register growth in its top and bottom lines when it reports fourth-quarter fiscal 2025 results on March 4, after market close. The Zacks Consensus Estimate for revenues is pegged at $1.73 billion, which indicates a rise of 7.9% from the year-ago figure.
The consensus estimate for quarterly earnings is pegged at 71 cents per share, indicating a 31.5% rise from the year-ago quarter's number. However, the consensus estimate for earnings has moved up a penny in the past 30 days.
American Eagle Outfitters, Inc. price-consensus-eps-surprise-chart | American Eagle Outfitters, Inc. Quote
The company’s earnings beat the consensus estimate by 23.3% in the last reported quarter. AEO delivered an earnings surprise of 35.1% in the trailing four quarters, on average.
American Eagle has experienced strong momentum, driven by well-curated product assortments and enhanced customer engagement, leading to robust holiday performance. With continued positive trends in American Eagle and Aerie, the company expects improved profitability compared to prior projections. These factors are set to support performance in the to-be-reported quarter.
AEO said that fourth quarter-to-date comparable sales (comps) through Jan. 3, 2026, increased in high-single digits, reflecting healthy consumer engagement through the peak holiday period. Management now raised its fiscal fourth-quarter operating income guidance to be nearly $167-$170 million, up from the earlier guidance of $155-$160 million. The increase reflects better-than-expected margin performance and assumes consolidated comps growth of 8-9% for the fiscal fourth quarter. We expect comparable sales to increase 9.2% for the fourth quarter.
American Eagle’s strategic initiatives have positioned it for sustained growth and improved operational efficiency. The disciplined approach to cost management, alongside a focus on profitability, is expected to contribute positively to the fiscal fourth quarter results.
AEO has been prioritizing investments in its digital channels, making foundational improvements to enrich the overall shopping experience. The company is also focused on optimizing its store fleet to ensure locations align with customer demand and deliver a best-in-class in-store experience. Innovations, solid omnichannel capabilities and inventory-optimization efforts are likely to have boosted the company’s top-line performance.
Our model predicts fourth-quarter fiscal 2025 total revenues to increase 5.7% year over year. We expect sales for the American Eagle brand to rise 5.5%. Sales for the Aerie brand are expected to increase by 5.2%.
Our proven model does not conclusively predict an earnings beat for American Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.
American Eagle currently has an Earnings ESP of -2.82% and a Zacks Rank of 1. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
With a forward 12-month price-to-earnings ratio of 14.36X, below the high level of 18.29X and the Retail - Apparel and Shoes industry’s average of 18.67X, the stock offers compelling value for investors seeking exposure to the sector.
AEO stock has surged 68.1% in the past six months, outperforming the industry’s 12.5% rise.
Here are three companies, which, according to our model, have the right combination of elements to post an earnings beat this season:
Dollar General Corporation DG currently has an Earnings ESP of +5.37% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings per share is pegged at $1.61, implying a 4.2% year-over-year decline. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $10.78 billion, which indicates an increase of 4.6% from the figure reported in the prior-year quarter. DG has a trailing four-quarter earnings surprise of 22.9%, on average.
Chewy, Inc. CHWY has an Earnings ESP of +0.36% and currently carries a Zacks Rank of 3. CHWY’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.26 billion, which suggests a 0.3% rise from the figure reported in the year-ago quarter.
The consensus estimate for Chewy’s fourth-quarter earnings is pinned at 28 cents per share, flat year over year. CHWY has a trailing four-quarter earnings surprise of 10.7%, on average.
Costco Wholesale Corporation COST has an Earnings ESP of +0.68% and currently carries a Zacks Rank of 3. COST’s top line is expected to advance year over year when it reports second-quarter fiscal 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $69.22 billion, which suggests an 8.6% jump from the figure reported in the year-ago quarter.
The company is expected to register an increase in the bottom line. The consensus estimate for Costco’s second-quarter earnings stands at $4.54 per share, calling for 12.9% growth from the year-ago quarter. COST has a trailing four-quarter earnings surprise of 0.5%, on average.
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This article originally published on Zacks Investment Research (zacks.com).
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