American Eagle guided revenue down 5% year-over-year with comparable sales expected to decline about 3%, intensifying pressure heading into the back-to-school season. Earnings per share are projected to drop 49% year-over-year to $0.20 after a larger-than-expected Q1 loss driven by markdowns and a $75 million inventory write-down. Promotions remain elevated, although OFFLINE and women's denim are outperforming. Management reports that inventory clean-up is largely complete and left fall/holiday buys flexible. The stock has seen retail investor interest following a recent ad campaign, adding volatility around the earnings report.
American Eagle Outfitters ( NYSE: AEO) reports Q2 FY2026 earnings after the close. It's been a bruising year so far: gross margins were crushed by a $75 million inventory write-down in Q1, and full-year guidance remains suspended. But executives are signaling optimism - saying the company is entering the critical back-to-school season in better shape. American Eagle has also been a stock of interest following Sydney Sweeney's appearance in the firms ad campaigns.
What to Expect When AEO Reports AEO trades at $13.58, above the Street's $11.56 average target but well below the $19 high target. Key Areas to Watch 1. Back-to-School Turnaround ExecutionManagement said "back-to-school is our Super Bowl" and has left Fall/Holiday inventory buys open for flexibility. With EPS forecast down 49% YoY, results must prove that margin hits and product misses are behind them.
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