American Eagle Outfitters' (AEO) gross profit of $552m rose 5% from $527m last year. The gross margin of 40.5% declined 40 basis points to last year. The net tariff impact was $20m or 150 basis points to gross margin. Higher markdowns were largely offset by positive sales and lower costs, including favorability in freight.

Operating income increased from $106m to $112m while net income increased to $91m from $80m.

“I’m extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations—all having a positive impact. Record third quarter revenue was highlighted by Aerie’s double-digit comparable sales increase and positive growth at American Eagle, contributing to results that exceeded expectations,” commented Jay Schottenstein, executive chairman of the board and chief executive officer, AEO Inc.

"Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season. We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and Offline. We are focused on finishing the season strong and sustaining our success into 2026 and beyond,” he concluded.

Based on stronger sales trends, the company is raising its fourth quarter operating income guidance to $155 to $160m based on comparable sales in the range of positive 8% to 9% with similar growth for total revenue.

The previous fourth quarter guidance of operating income of $125m to $130m was based on comparable sales in the positive low single digits. For the year, adjusted operating income guidance rises to $303m to $308m, with comparable sales in the low single digits from prior guidance of adjusted operating income of $255m to $265m on flat comparable sales.