American Eagle's Long-Term Growth Trajectory Intact Despite Weak Sales Guidance, UBS Says

LISTEN UP, INVESTORS! American Eagle Outfitters, Inc. (NYSE: AEO) just announced its financial results for the fourth quarter and fiscal year 2024, and while the first quarter of 2025 is off to a slower start than expected, the long-term growth trajectory remains intact. Let's dive into the details and see why UBS is still bullish on this stock!



First, let's talk about the numbers. Total comparable sales increased by 3% in the fourth quarter, following an 8% reported comp growth last year. Aerie, the lifestyle brand, saw a 6% increase in comparable sales, while American Eagle, the jeans and apparel brand, grew by 1%. For the full year, total comparable sales increased by 4%, with Aerie up 5% and American Eagle up 3%. These numbers show that the company is still growing, despite the slower start to 2025.

Now, let's talk about the Powering Profitable Growth Plan. This strategic plan is designed to deliver $5.7 to $6.0 billion in revenue and an approximate 10% operating margin by the end of Fiscal 2026. The plan includes profit improvement initiatives, customer engagement initiatives, operational efficiencies, inventory management, and shareholder returns. These initiatives have already shown results, with the company delivering strong operating profit growth and positive momentum across its brands and channels.

But what about the weak sales guidance for the first quarter of 2025? The company is taking proactive measures to strengthen its top-line performance, manage inventory, and reduce expenses. These measures include disciplined expense management, operating efficiencies, and a focus on long-term strategic priorities. The company has already seen success with these measures, with selling, general, and administrative expenses decreasing by 6% in the fourth quarter of 2024.



So, what does this mean for investors? Despite the weak sales guidance for the first quarter of 2025, the long-term growth trajectory of American Eagle Outfitters remains intact. The company's strategic plan, proactive measures, and strong performance in the fourth quarter of 2024 all point to a bright future for this stock. Don't miss out on this opportunity to invest in a company with a proven track record of growth and profitability!

BUY NOW, INVESTORS! American Eagle Outfitters is a no-brainer for your portfolio. The long-term growth trajectory is intact, and the company is taking proactive measures to navigate through an uncertain consumer and operating landscape. Don't sit on cash, and don't miss out on this opportunity to invest in a company with a proven track record of growth and profitability. Boo-yah! This stock's a winner!