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What were the key takeaways from American Eagle Outfitters's earnings call?

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Did American Eagle Outfitters beat or miss consensus estimates last quarter?

- **Revenue Beat**: Q3 revenue up 6% to $1.4B, with Aerie comps +11% and AE +1% (sequential improvement). Q4 guidance raised to 8-9% comp growth.
- **Profitability Recovery**: Operating income $113M vs. $95-100M guidance, driven by demand and cost control. Gross margin stabilized at 40.5% despite $20M tariffs.
- **Aerie Growth Engine**: Aerie/Aerie Offline revenue near $2B with <5% market share, positioning for long-term expansion. Sleep and Offline activewear categories outperforming.
- **Marketing Impact**: $44B impressions from Sydney Sweeney and Travis Kelce campaigns, driving 1M+ new loyalty members. Q4 ad spend to maintain 5%+ sales penetration.

**【CEO Summary Section】**
- **Record Revenue Growth**: Total revenue increased 6% to $1.4 billion, driven by 4% comparable sales growth across both AE and Aerie. Aerie comps rose 11%, while AE comps improved 1% sequentially.
- **Operational Turnaround**: Operating income of $113 million exceeded guidance, fueled by strong demand and cost control. Diluted EPS of $0.53 rose 10% year-over-year.
- **Strategic Investments**: Incremental ad spend and operational improvements positioned the business for long-term growth, with Aerie and Offline emerging as key growth engines.

**【CFO Financial Commentary】**
- **Top-Line Strength**: Gross profit dollars increased 5% to $552 million, despite a 40 basis point margin decline due to tariffs. Operating margin of 8.3% reflected $20 million tariff impact.
- **Inventory Management**: Ending inventory rose 11% ($1.1 billion), driven by Aerie/Aerie Offline growth and AE denim restocking. Units up 8% supported Q4 guidance of 8-9% comp growth.
- **Leverage Opportunities**: Buying, occupancy, and warehousing costs leveraged 20 basis points, while SG&A increased 10% due to ad spend. Q4 guidance raised to $155-160 million operating income.

**【Q&A Highlights】**
- **Q4 Momentum**: November comps ahead of 8-9% guidance, with Aerie up high teens and AE low single digits. Digital sales outpaced stores, benefiting from Sydney Sweeney and Travis Kelce campaigns.
- **Tariff Mitigation**: $50 million Q4 tariff impact expected, with ongoing cost offsets (e.g., freight, in-stock management). 2026 tariff impact estimated at $25-30 million per quarter.
- **Store Strategy**: 2026 plans include 40-50 new Aerie/Offline stores, while AE closures slow to ~20 annually. Remodeled AE stores comp +20%+.
- **Customer Engagement**: Loyalty members up 1 million, with Aerie sleep and Offline activewear driving new customer acquisition. Gen Z engagement strong across brands.

American Eagle Outfitters, Inc. (AEO) Q3 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

AEO

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