AEO Stock Forecast & Price Target

American Eagle Outfitters Inc. reported a positive performance with total comparable sales up 3% year-over-year, showcasing consistent growth in the American Eagle Women’s segment, particularly in denim and dresses. The company achieved a higher operating margin of 8.9%, exceeding market expectations, due to SG&A leverage and better cost management despite increased marketing expenses. Additionally, the gross margin for the fourth quarter reached 37.3%, surpassing analyst estimates, indicating strong underlying profitability and effective management of product categories, including activewear and seasonal apparel.

American Eagle Outfitters, Inc. has indicated a negative financial outlook, with a forecasted mid-single digit revenue decline for the first quarter year-over-year, which is significantly lower than prior consensus expectations of modest growth. The company's fourth-quarter revenue also contracted by approximately 4.4% year-over-year, reflecting challenges that align with a full-year guidance projecting a low-single digit revenue decline, falling short of earlier estimates for growth. Additionally, the guidance for fiscal year 2025 operating income underperformed, with projections of $360 million to $375 million well below the consensus of $454 million, indicating persistent struggles in driving profitability amidst steady gross margins.