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American Eagle (AEO)
NYSE:AEO
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American Eagle
(NYSE:AEO)
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Rating:66Neutral
Price Target:
$21.00
▲(16.86% Upside)
American Eagle's overall stock score reflects a stable financial foundation with reasonable profitability and improved cash flow. Technical analysis shows bullish momentum but warns of overbought conditions. Valuation is fair, supported by a moderate P/E ratio and a decent dividend yield. The earnings call provided positive insights, though tariff costs and declining comps pose challenges.
Positive Factors
Cash Flow Improvement
The significant improvement in free cash flow indicates enhanced liquidity and financial flexibility, allowing American Eagle to invest in growth opportunities and return capital to shareholders.
Successful Marketing Campaigns
The successful marketing campaigns have significantly increased brand visibility and customer acquisition, strengthening American Eagle's market position and driving future sales growth.
Aerie Brand Growth
The growth in Aerie's revenue and comps highlights the brand's strong market demand and potential for continued expansion, contributing positively to American Eagle's overall business performance.
Negative Factors
Decline in American Eagle Comps
The decline in comps for the American Eagle brand suggests challenges in maintaining sales momentum, which could impact the company's revenue growth and market competitiveness.
Increased Tariff Costs
Rising tariff costs are expected to pressure gross margins, potentially reducing profitability and affecting the company's ability to invest in growth initiatives.
Inventory Cost Increase
Higher inventory costs, driven by tariffs, may lead to reduced margins and increased financial strain, challenging American Eagle's cost management efforts.
American Eagle (AEO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.04B
Dividend Yield2.78%
Average Volume (3M)16.30M
Price to Earnings (P/E)18.2
Beta (1Y)1.12
Revenue Growth-2.73%
EPS Growth-16.71%
CountryUS
Employees9,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.45
Shares Outstanding169,338,840
10 Day Avg. Volume12,691,005
30 Day Avg. Volume16,304,790
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)1.76
Price to Sales (P/S)0.58
P/FCF Ratio12.25
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit1.91
Enterprise Value/Ebitda7.14
Forecast
1Y Price Target
$16.25Price Target Upside-9.57% Downside
Rating ConsensusHold
Number of Analyst Covering12
American Eagle Business Overview & Revenue Model
Company DescriptionAmerican Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company provides jeans, and specialty apparel and accessories for women and men; and intimates, apparel, activewear, and swim collections, as well as personal care products for women. It also offers graphic tees and other clothing products under the Tailgate brand name; and menswear products under the Todd Snyder New York brand name. As of January 29, 2022, the company operated 880 American Eagle stores, 244 Aerie brand stand-alone stores, and five Todd Snyder stores in the United States, Canada, Mexico, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 260 locations operated by licensees in 28 countries, as well as provides products through its Websites ae.com, aerie.com, and toddsnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyAmerican Eagle generates revenue primarily through the sale of apparel and accessories in its retail stores and e-commerce platforms. The company operates on a direct-to-consumer model, allowing it to maintain control over its branding and customer experience. Key revenue streams include sales from its flagship American Eagle brand, the Aerie brand, and collaborations with external partners for exclusive merchandise. Additionally, AEO benefits from seasonal promotions and loyalty programs that encourage repeat purchases. The company also leverages its online presence to reach a broader audience, enhancing its overall sales potential.
American Eagle Key Performance Indicators (KPIs)
Any
Store Count
Tracks the number of retail locations, reflecting the company’s physical market presence and potential for customer reach and sales growth.
Tracks the number of retail locations, reflecting the company’s physical market presence and potential for customer reach and sales growth.
Data provided by:
Main Street Data
Main Street DataAmerican Eagle Earnings Call Summary
Earnings Call Date:Aug 02, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 25, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue performance, successful marketing campaigns, and improved operating income, but faced challenges with American Eagle's comp decline and increased tariff costs. Positive trends in Aerie and early Q3 indicate a promising outlook.Q2-2025 Updates
Positive Updates
Second Highest Q2 Revenue in Company History
Total revenue for the quarter was $1.28 billion, marking the second highest ever posted for Q2, demonstrating meaningful improvement from the first quarter.
Aerie's Remarkable Turnaround
Aerie achieved a comp growth of 3% and record second-quarter revenue, driven by strong demand in major categories like intimates, soft dressing, and activewear.
Operating Income and EPS Growth
Operating income improved by 2% to $103 million, and diluted EPS increased 15% compared to last year, significantly exceeding expectations.
Successful Marketing Campaigns
The campaigns featuring Sydney Sweeney and Travis Kelce generated 40 billion impressions and increased customer counts by more than 700,000, with positive traffic trends continuing into August.
Positive Start to Q3
The third quarter began with consolidated comps up in the mid-single digits, including strong performance during the Labor Day weekend.
Negative Updates
Decline in American Eagle Comps
American Eagle's second-quarter comps declined, with early spring receipts and softer demand in shorts and bottoms impacting performance.
Increased Tariff Costs
The company anticipates $20 million in additional tariff costs in Q3 and $40-$50 million in Q4, pressuring gross margins.
Inventory Cost Increase
Consolidated ending inventory cost increased 8%, primarily due to tariff impacts, with units up 3%.
Company Guidance
During the second quarter of 2025, American Eagle Outfitters, Inc. reported a total revenue of $1.28 billion, marking their second highest revenue for the quarter and a significant improvement from the first quarter. Aerie achieved comp growth of 3%, while American Eagle showed improvement in key categories. Operating income increased by 2% to $103 million, and diluted EPS rose 15% compared to the previous year. The company managed SG&A expenses effectively, resulting in a decline from the previous year. They emphasized investments in marketing campaigns, such as collaborations with Sydney Sweeney and Travis Kelce, which generated 40 billion impressions and substantial new customer acquisitions. Despite a dynamic consumer backdrop, the company focused on controlling costs and enhancing customer experience. Inventory cost increased by 8%, mainly due to tariffs, but the company is mitigating these impacts through various strategies. Year-to-date, they returned $276 million to shareholders via dividends and share repurchases, completing a $200 million accelerated repurchase program. Looking ahead, they anticipate low single-digit increases in comparable sales for the third and fourth quarters, with operating profits projected at $95-$100 million and $125-$130 million, respectively, including significant tariff impacts.American Eagle Financial Statement Overview
Summary
American Eagle's financial performance is stable with reasonable profitability margins despite a decline in revenue growth. The balance sheet shows moderate leverage and good equity management, while cash flow performance has improved significantly, enhancing liquidity.Income Statement
American Eagle's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth by 14%, which is concerning. However, the company maintains a reasonable gross profit margin of 36.99% and a net profit margin of 3.74%. The EBIT and EBITDA margins are also moderate at 5.72% and 9.87%, respectively. Despite the revenue decline, the company has managed to sustain profitability, which is a positive sign.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.16, indicating a moderate level of leverage. The return on equity is 12.07%, showing decent profitability relative to shareholder equity. The equity ratio stands at 38.04%, suggesting a balanced capital structure. While the leverage is slightly high, the company has managed to maintain a healthy equity base.70
Positive
Cash Flow
Cash flow analysis reveals a strong free cash flow growth rate of 33.87% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.52, and the free cash flow to net income ratio is 0.69, reflecting efficient cash conversion. Despite fluctuations in free cash flow growth in previous periods, the recent improvement is a positive indicator.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.27B | 5.33B | 5.26B | 4.99B | 5.01B | 3.76B |
| Gross Profit | 1.95B | 2.09B | 2.02B | 1.75B | 1.99B | 1.15B |
| EBITDA | 520.05M | 665.39M | 477.02M | 404.98M | 756.43M | -104.73M |
| Net Income | 197.10M | 329.38M | 170.04M | 125.14M | 419.63M | -209.27M |
Balance Sheet | ||||||
| Total Assets | 4.06B | 3.83B | 3.56B | 3.42B | 3.79B | 3.43B |
| Cash, Cash Equivalents and Short-Term Investments | 126.78M | 358.96M | 454.09M | 170.21M | 434.77M | 850.48M |
| Total Debt | 1.79B | 1.45B | 1.19B | 1.37B | 1.81B | 1.80B |
| Total Liabilities | 2.52B | 2.06B | 1.82B | 1.82B | 2.36B | 2.35B |
| Stockholders Equity | 1.54B | 1.77B | 1.74B | 1.60B | 1.42B | 1.09B |
Cash Flow | ||||||
| Free Cash Flow | 284.21M | 254.26M | 406.27M | 145.92M | 69.82M | 74.52M |
| Operating Cash Flow | 409.80M | 476.80M | 580.71M | 406.30M | 303.67M | 202.50M |
| Investing Cash Flow | -286.29M | -217.51M | -287.43M | -261.38M | -594.60M | -73.94M |
| Financing Cash Flow | -190.11M | -301.91M | -109.47M | -407.89M | -125.20M | 359.91M |
American Eagle Technical Analysis
Positive
17.97
Price Trends
13.93
Positive
12.19
Positive
12.98
Positive
Market Momentum
1.57
Positive
58.42
Neutral
21.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Positive. The current price of 17.97 is above the 20-day moving average (MA) of 17.18, above the 50-day MA of 13.93, and above the 200-day MA of 12.98, indicating a bullish trend. The MACD of 1.57 indicates Positive momentum. The RSI at 58.42 is Neutral, neither overbought nor oversold. The STOCH value of 21.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEO.
American Eagle Risk Analysis
American Eagle disclosed 30 risk factors in its most recent earnings report. American Eagle reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
American Eagle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | 3.06B | 15.01 | 46.12% | 6.49% | 1.62% | -2.57% | |
79 Outperform | 6.47B | 14.10 | 18.42% | ― | 9.63% | 56.06% | |
77 Outperform | 4.13B | 8.26 | 41.86% | ― | 9.34% | 10.61% | |
72 Outperform | 2.05B | 14.38 | 25.78% | ― | 2.30% | 8.85% | |
66 Neutral | $3.04B | 18.17 | 12.17% | 2.78% | -2.73% | -16.71% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
AEO
American Eagle
17.97
-1.95
-9.79%
ANF
Abercrombie Fitch
87.27
-50.46
-36.64%
BKE
Buckle
60.12
21.27
54.75%
FL
Foot Locker
24.01
-2.24
-8.53%
URBN
Urban Outfitters
72.05
34.79
93.37%
VSCO
Victoria's Secret
25.69
-0.17
-0.66%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.