AEO Faces Market Pressure As Analysts Weigh Marketing Costs

American Eagle Outfitters, Inc. (NYSE:AEO) shares are trading lower after the company reported fourth-quarter results and Telsey Advisory Group lowered its price forecast on the stock.

Earnings Snapshot

The company reported adjusted EPS of 84 cents, beating the consensus of 72 cents, and sales of $1.761 billion exceeded the street view of $1.743 billion.

Revenue rose 10% led by a comparable sales increase of 8% in the quarter. By segment, Aerie comparable sales rose 23% and American Eagle comparable sales grew 2%.

The company sees comparable sales in high single digits in the first quarter and mid single digits in 2026.

Analyst View

Telsey: Analyst Dana Telsey writes that AEO delivered strong results, with sales and gross margin slightly above expectations, driving operating income upside versus raised guidance in mid-January.

Early FY26 momentum appears positive, with first-quarter comps ahead of expectations and operating income guidance bracketing consensus, adds the analyst.

The analyst says that full-year guidance points to better-than-expected comp and operating income growth, reflecting improvements in operations, assortments, and well-timed marketing campaigns in the second half of FY25.

However, the company’s comps still lag, and maintaining growth in off-peak periods remains challenging, adds the analyst.

Consequently, the analyst trimmed the price forecast to $25 from $28 on planned heavy marketing spend in the first half amid macro uncertainties.

BTIG: Analyst Janine Stichter reiterated a Neutral rating and writes that results were solid, and the outlook largely aligns with their expectations.

The analyst says that profitability is second-half weighted, reflecting the timing of tariffs and marketing investments.

The larger AE brand, however, has yet to show similar gains, despite focused marketing, adds the analyst.

AEO Price Action: American Eagle Outfitters shares were down 14.03% at $19.29 at the time of publication on Thursday, according to Benzinga Pro data.

Photo by refrina via Shutterstock