The US clothing group American Eagle Outfitters, Inc. (AEO) was able to set a new sales record and significantly improve its profitability in the third quarter of the 2025/26 financial year.
The company justified the strong results by saying that strategic measures in the areas of merchandising, marketing and operations had gained momentum. Accordingly, this dynamic has been reinforced by the success of recent attention-grabbing marketing campaigns with Sydney Sweeney, Travis Kelce and most recently Martha Stewart. Each of these campaigns led to a strong increase in engagement and traffic, helping to attract new customers, the clothing retailer explained.
Net sales in the third quarter, ended November 1, rose 6 percent year-over-year to $1.36 billion (1.25 billion euros). Like-for-like sales increased by four percent. The growth driver was once again the Aerie brand, with like-for-like sales growth of eleven percent, while the American Eagle brand recorded an increase of one percent.
“Record third quarter sales were driven by double-digit like-for-like sales growth at Aerie and positive growth at American Eagle, resulting in results that exceeded expectations,” said Jay Schottenstein, the group’s executive chairman and CEO. The momentum continued at the beginning of the fourth quarter and ensured an “excellent start” to the Christmas business. Schottenstein emphasized that new record results were achieved on Thanksgiving weekend thanks to strong demand across all brands and channels.
American Eagle raises forecasts after strong third quarter
In the last quarter, the gross margin fell by 40 basis points to 40.5 percent due to additional tariff charges of $20 million. However, operating profit increased by six percent to $113 million. Net profit rose 14 percent to $91 million (78 million euros).
Due to the stronger sales development, AEO raised its forecast for operating profit in the fourth quarter. The target is now between $155 and $160 million. This forecast is based on like-for-like sales growth in the range of eight to nine percent with similar growth in total sales. Management had previously forecast operating profit of between $125 million and $130 million and like-for-like sales growth in the low single-digit range.
The forecasts for the entire financial year were also increased. An operating result adjusted for special items in the range of 303 to 308 million US dollars and like-for-like sales growth in the low single-digit range are now expected. Previously, the company had expected adjusted operating income of between $255 million and $265 million and flat like-for-like sales.
Encouraged by the momentum and strong start to the holiday season, Schottenstein reiterated that AEO is entering 2026 from a position of strength. “All in all, I am very pleased with the progress and the clear turnaround since the first half of this year,” he explained.
American Eagle marketing campaigns drive sales
The company recently unveiled its latest marketing campaign featuring 84-year-old lifestyle icon Martha Stewart. She steps out entirely in denim for “Give Great Jeans” – the brand’s new holiday campaign. The announcement follows a high-profile and controversial campaign with Sydney Sweeney earlier this year.
Despite criticism of its wordplay, the collaboration sold out within a week. It ensured record traffic and new customers. Fashion legal expert Susan Scafidi told The Post that Stewart’s choice allowed the brand to change the narrative without responding to previous criticism. At the same time, we are setting an example for age diversity.
Schottenstein highlighted the positive effects of the recent marketing campaigns. “We are encouraged by the impact of the campaigns and collaborations with Sydney Sweeney and Travis Kelce and now the Christmas campaign with Martha Stewart. We are seeing measurable benefits, particularly on our digital channels,” he said.
He continues to see long-term growth opportunities across the portfolio, particularly in Aerie and Offline. “With sales of just under $2 billion and a market share of less than 5 percent, this suggests significant future expansion potential,” noted Schottenstein. He also highlighted the American Eagle brand’s incremental progress, strength in denim and Aerie’s strong stream of best-sellers and new products.
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