During the quarter ended 31 January 2026, total net revenue of AEO reached $1.8bn, representing a 10% increase compared to the same period last year.
Comparable sales rose by 8%, building on 3% growth in the prior year’s fourth quarter, with Aerie leading the way through a 23% surge and OFFLINE also delivering strong double-digit gains.
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The American Eagle brand saw a 2% increase in comparable sales, maintaining its positive trajectory.
AEO executive chairman of the Board and chief executive officer Jay Schottenstein said: “I am extremely pleased with the strong execution in the back half of the year, which reignited growth across our brands and channels. Building on the improved trends beginning last summer, we achieved a record fourth quarter and holiday period, with double digit growth at Aerie and OFFLINE and solid, positive performance at American Eagle. Compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter. I want to thank our associates for their resilience and outstanding execution to deliver a strong finish to 2025.”
Key metrics from Q4 FY25
AEO posted gross profit of $651m over the quarter from $599m in the same period a year ago, although gross margin edged down by 30 basis points to 37%.
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By GlobalDataThe company noted that tariffs had a $50 million negative impact on gross margin during the quarter.
Despite increased markdowns, operational efficiencies and favourable currency movements helped offset these pressures.
Selling, general and administrative (SG&A) expenses totalled $418m for the quarter, up 4% year-over-year.
Operating profit as calculated in generally Accepted Accounting Principles (GAAP) stood at $96m after accounting for $84m in impairment and restructuring charges related to logistics business exits and store impairments. Diluted earnings per share were $0.50 in Q4 FY25 compared to $0.54 in the previous year.
Overall performance in full year 2025
AEO generated $5.5 billion in total net revenue in FY25, up 3% from last year. Comparable sales advanced by 3%, following a 4% increase in the prior period.
Gross profit for the year was $2.0bn, down 3% from last year and gross margin declined by 230 basis points to 36.9%, primarily due to an inventory write-down in the first quarter and higher markdowns combined with ongoing tariff impacts.
GAAP operating income was $226m, which translate to diluted EPS of $1.09.
The company ended the fiscal with total inventory of $702m with units up 3%.
Outlook for first quarter and full year 2026
Looking forward to fiscal year 2026, AEO expects high single-digit comparable sales growth for the first quarter and mid-single-digit growth for the full year, along with improved gross margins.
Operating income is projected between $20m and $25m for the first quarter of fiscal 2026, with annual operating income anticipated between $390m and $410m.
Capital expenditures are expected to be within the range of $250m to $260m for the full year.
“We enter 2026 from a position of strength with the goal of building on this year’s successes. The first quarter is off to a positive start and we remain focused on investing in our brands and driving additional corporate savings and efficiency across the business. I’m confident that our strategic actions will lead to long-term profitable growth and shareholder value creation,” Schottenstein added.
