AEO Stock Forecast & Price Target

American Eagle Outfitters Inc. reported a total comparable sales growth of 3% year-over-year, maintaining positive momentum with a sixth consecutive quarter of growth for the AE brand, particularly strong in women's denim and dresses. The company's operating margin improved by 50 basis points to 8.9%, surpassing consensus expectations of 8.4%, attributed to effective management of selling, general and administrative expenses, which leveraged 40 basis points during the quarter. Looking forward to fiscal year 2025, expectations for strengthening topline trends and continued operating margin expansion indicate a favorable outlook for American Eagle Outfitters's future financial performance.

American Eagle Outfitters Inc. has projected a mid-single digit revenue decline year-over-year for the first quarter, which is significantly lower than the previous consensus expectation of a 1.3% revenue increase. Additionally, the company's full-year guidance indicates a low-single digit revenue decline, again falling short of the consensus forecast of 3% growth, emphasizing ongoing challenges in revenue performance. Furthermore, the projections for operating income in FY25 are notably lower than expected, with a guidance range of $360 million to $375 million, which is substantially below the prior consensus of $454 million, indicating a potential deterioration in profitability.