American Eagle had Sydney Sweeney. But its lesser-known lingerie brand carried the day.

By Claudia Assis

American Eagle raises outlook for the year on 'strong momentum' for sales, and the stock soars toward an 18-month high

An American Eagle store in New York City in August. Positive sales trends led the company to raise its outlook for the holiday quarter and for the year.

Shares of American Eagle Outfitters Inc. soared toward a more than 18-month high in early trading Wednesday, after the retailer reported better-than-expected sales, especially for its Aerie brand, and raised its outlook for fiscal 2025.

American Eagle (AEO) said late-Tuesday that comparable-store sales at its Aerie stores, which sells bralettes, leggings and other lingerie and loungewear, rose 11% in the fiscal third quarter that ended Nov. 1.

Same-store sales for American Eagle, its namesake brand, rose 1%, the company said. In total, same-store sales rose 4%, compared with Wall Street's expectations of a 2.4% increase.

The positive sales trends led the company to change its tune for comparable-store sales expectations for the fiscal year, moving away from a forecast of flat sales.

The "strong momentum" has continued, including an "excellent" start to the holiday season and a "record-breaking" Thanksgiving weekend, American Eagle said. It saw heightened demand across its brands and sales channels, underscored by "outstanding growth" at Aerie as well as Offline, the company's activewear brand.

The stock shot up 12.6% in premarket trading, which put it on track to open around the highest closing price seen since May 29, 2024.

Earlier this year, American Eagle Outfitters made waves with an advertising campaign featuring actress Sydney Sweeney and the tagline "Sydney Sweeney Has Great Jeans."

The ensuing controversy had progressives claiming it amounted to an endorsement of eugenics, while conservatives, including President Donald Trump, defended the ad.

In recent days, lifestyle personality and businesswoman Martha Stewart has taken over as the face of the company's jeans ads.

American Eagle said its quarterly revenue rose 6% to a "record" $1.4 billion, which was ahead of Wall Street's expectations for revenue of $1.3 billion, according to FactSet. Earnings of 53 cents a share were also above forecasts for 44 cents a share.

Based on the sales trends, American Eagle raised its fiscal fourth-quarter operating-income guidance to $155 million to $160 million, based on projected growth for same-store sales in a range of 8% to 9%, it said. Analysts polled by FactSet are modeling same-store sales growth of 2.1% for the current quarter.

A previous guidance called for operating income of $125 million to $130 million, based on comparable sales in the low single digits.

For the year, the company increased its adjusted operating-income guidance rises to $303 million to $308 million, with comparable sales in the low single digits, from an earlier guidance of adjusted operating income of $255 million to $265 million on flat comparable sales.

Through Tuesday, American Eagle's stock had rallied 25% in 2025, while the State Street SPDR S&P Retail ETF XRT had gained 5.9% and the S&P 500 index SPX had advanced 16.1%.

-Claudia Assis

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