American Eagle Keeps Sales Forecast as Shoppers Wait for Deals
American Eagle Outfitters maintained its fiscal 2026 comparable-sales forecast after a mixed second quarter, as strong momentum at Aerie and OFFLINE offset pressure in seasonal merchandise at its core American Eagle brand.
The retailer reported results on September 9 for the 13 weeks ended August 1. Revenue reached $1.380 billion, up 8% from a year earlier, while total comparable sales increased 6%.
American Eagle kept its full-year comparable-sales outlook at mid-single-digit growth. It also updated its fiscal 2026 operating-income guidance to $540 million to $550 million, including the benefit of tariff refunds. The sales forecast was not an upgrade, and the company cautioned that demand remains uneven across brands and categories.
Aerie and OFFLINE lead the portfolio
Aerie and OFFLINE continued to provide the strongest momentum. The combined business posted 25% revenue growth, including a 19% increase in comparable sales. American Eagle comparable sales, however, decreased 1%.
Reuters reported that apparel shoppers have been emphasizing value and essentials while waiting for promotions before buying clothing and accessories. The report also described pressure in seasonal merchandise, including shorts and other fashion items, within the American Eagle brand.
Those observations are reported shopper and company commentary, not a definitive measurement of every U.S. consumer. They point to continued price sensitivity in discretionary apparel, where shoppers can delay purchases or wait for discounts.
Inventory is rising as the company adjusts
American Eagle said inventory at cost increased 14% year over year, while inventory units increased 9%. The company said the increase in cost included the effect of incremental tariffs.
The retailer plans to continue rebalancing inventory among brands and categories through the rest of the year. Reuters reported that third-quarter inventory issues and promotional activity are concentrated in seasonal businesses, especially shorts, and that some fashion merchandise may need to be cleared.
That could create more promotional or clearance activity in affected American Eagle categories, although the company did not announce specific discounts or dates. The results do not indicate that all of American Eagle’s brands are weakening: Aerie and OFFLINE were notably stronger, while the main American Eagle business faced more pressure.
Tariff refunds boosted reported profit
American Eagle received $196 million in tariff refunds, including interest, during the quarter. The company said the refunds produced a $179 million net benefit in gross profit and a $161 million net benefit to operating income after related incentive compensation.
That one-time or non-recurring benefit materially affected the quarter’s reported profitability. Gross profit rose 34% to $672 million, and operating profit rose to $211 million from $103 million a year earlier, but those comparisons include the tariff-refund effect.
The company also disclosed that tariffs affected inventory cost. Its results do not, by themselves, establish that tariffs caused consumer prices to rise.
What shoppers should watch
American Eagle’s results may mean continued promotions in seasonal categories as the company works through inventory, but shoppers should not assume that every product or brand will be discounted in the same way. The retailer is still forecasting fiscal 2026 sales growth, with Aerie and OFFLINE carrying much of the current momentum.
The company’s next tests will include third-quarter comparable sales, gross margin, promotional activity and inventory levels. American Eagle’s third-quarter outlook calls for comparable-sales growth in the mid-to-high single digits, gross margin roughly flat from a year earlier and operating income of $110 million to $115 million. Those are forward-looking estimates and may change.
Sources
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