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American Eagle (AEO)
NYSE:AEO

American Eagle (AEO) AI Stock Analysis

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American Eagle

(NYSE:AEO)

Rating:64Neutral
Price Target:
$10.00
▲(2.04%Upside)
American Eagle's overall stock score reflects its strong financial foundation and attractive valuation, tempered by negative technical signals and challenges highlighted in the latest earnings call. While the company shows potential for long-term growth, near-term hurdles such as declining sales and inventory issues must be addressed.
Positive Factors
Growth Expectations
Management cited expectations for sequentially improved growth, profitability, and cash flows as the year progresses with fresh inventory hitting shelves.
Inventory Management
Management expects inventory to be more aligned with sales trends following the write-down, potentially improving future sales.
Negative Factors
Cost Pressures
Tariffs are expected to negatively impact the cost of goods sold by $40 million in the fiscal year, affecting profitability.
Financial Performance
AEO reported a first quarter adjusted EPS loss based on revenues down, including same-store-sales down and gross margins significantly lower.
Market Sentiment
Investor sentiment remains very negative with shares trading below consensus estimates, indicating concerns over AEO's current market position.

American Eagle (AEO) vs. SPDR S&P 500 ETF (SPY)

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 makes money primarily through the sale of its apparel, accessories, and personal care products under the American Eagle and Aerie brands. Its revenue model is predominantly based on retail sales from its network of physical stores and a growing e-commerce platform. The company also generates income through its loyalty programs and credit card partnerships, which encourage repeat purchases and enhance customer engagement. Additionally, AEO benefits from strategic partnerships and collaborations that expand its product offerings and market reach. Key factors contributing to its earnings include brand strength, product innovation, a strong digital presence, and effective supply chain management.

American Eagle Key Performance Indicators (KPIs)

Any
Any
Store Count
Store Count
Tracks the number of retail locations, reflecting the company’s physical market presence and potential for customer reach and sales growth.
Chart InsightsAmerican Eagle's store count has shown fluctuations, peaking in late 2023 before a slight decline into early 2025. Despite this, the company achieved record revenue in 2024, driven by strong brand performance and operational efficiency. However, challenges such as declining mall traffic and a softer consumer environment in 2025 may impact future store performance. The company is focusing on store remodels and digital enhancements to counteract these trends and sustain growth.
Data provided by:Main Street Data

American Eagle Earnings Call Summary

Earnings Call Date:May 03, 2025
(Q1-2025)
|
% Change Since: -13.43%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Negative
The earnings call highlighted several strategic initiatives and achievements, such as share repurchases and growth in specific segments like Offline by Aerie. However, these positives were overshadowed by significant challenges, including a large inventory write-down, declining comps, and increased promotional activity leading to margin pressure. The company is optimistic about future improvements but faces substantial near-term hurdles.
Q1-2025 Updates
Positive Updates
Accelerated Share Repurchase Program
Initiation of a $200 million accelerated share repurchase program and $31 million in open market shares repurchases, indicating confidence in long-term growth.
Intimates and Offline by Aerie Growth
Offline by Aerie demonstrated positive growth, gaining market share and expanding customer awareness. Intimates improved sequentially, gaining market share with newness in fabrication and design.
Supply Chain Optimization
Actions to strengthen the supply chain network included closing two edge fulfillment centers, expected to generate annualized savings of approximately $5 million.
Market Share Gains
Despite challenges, American Eagle and Aerie held or gained market share in categories like intimates and denim.
Negative Updates
Inventory Write-Down
A $75 million inventory write-down on spring and summer goods resulted in a $68 million adjusted operating loss for the quarter.
Comparable Sales Decline
American Eagle comps were down 2% and Aerie comps declined 4%. Consolidated revenue decreased by 5% year-over-year.
Increased Promotional Activity
Promotional activity was up, resulting in lower average unit retail (AUR) prices and significant margin pressure.
Merchandising Challenges
The company faced product misses in key categories, especially in soft apparel like fleece tops and shorts, and higher product costs.
Gross Margin Decline
The gross margin was impacted, decreasing by 960 basis points driven by inventory write-downs and higher in-season markdowns.
Company Guidance
During the American Eagle Outfitters First Quarter 2025 Earnings Call, several key metrics and guidance were provided. The company reported a $68 million adjusted operating loss, driven by a $75 million inventory write-down and a decrease in comparable sales of 3%. American Eagle comp sales fell by 2%, while Aerie's dropped by 4%. Gross profit was $322 million, with a gross margin of 29.6%, affected by a 960 basis point decline in merchandise margin. The SG&A expenses grew by 2%, largely due to increased advertising. Capital expenditures for the first quarter totaled $62 million, with plans to recadence some investments and reduce full-year CapEx to approximately $275 million. The company also initiated a $200 million accelerated share repurchase program and completed $31 million in open market share repurchases, alongside $22 million in cash dividends paid. For the second quarter, revenue is expected to decline by 5%, with operating income projected between $40 to $45 million, and SG&A expenses anticipated to remain flat year-over-year.

American Eagle Financial Statement Overview

Summary
American Eagle demonstrates a solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains reasonable leverage, although its equity ratio suggests some reliance on debt. Despite fluctuations in net income historically, the overall trajectory remains positive, making American Eagle a stable entity in the retail sector.
Income Statement
72
Positive
American Eagle's income statement shows robust revenue growth with a 1.27% increase from 2024 to 2025. The gross profit margin is a strong 39.18%, and the net profit margin has improved to 6.18%. Both EBIT and EBITDA margins have shown improvement, indicating enhanced operational efficiency. However, the net income has fluctuated in prior years, which could be a concern for stability.
Balance Sheet
68
Positive
The balance sheet reflects a moderate debt-to-equity ratio of 0.82, showing a balanced use of debt and equity financing. The return on equity is at 18.64%, which is a positive indicator of profitability. However, the equity ratio stands at 46.13%, suggesting a moderate reliance on liabilities. Overall, the company's leverage is manageable, but it could increase the risk during periods of financial stress.
Cash Flow
75
Positive
The cash flow statement highlights a strong free cash flow of $476.8 million, with a free cash flow growth rate of 17.34% from the previous year. The operating cash flow to net income ratio is 1.45, indicating good cash generation relative to net income. The free cash flow to net income ratio of 1.45 further underscores the company's solid cash position. This strong cash flow performance provides a cushion against financial volatility.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
5.33B5.26B4.99B5.01B3.76B
Gross Profit
2.09B2.02B1.75B1.99B1.15B
EBIT
427.30M222.72M247.05M591.07M288.31M
EBITDA
665.39M477.02M404.98M756.43M-104.73M
Net Income Common Stockholders
329.38M170.04M125.14M419.63M-209.27M
Balance SheetCash, Cash Equivalents and Short-Term Investments
358.96M454.09M170.21M434.77M850.48M
Total Assets
3.83B3.56B3.42B3.79B3.43B
Total Debt
1.45B1.19B1.37B1.81B1.80B
Net Debt
1.14B831.54M1.20B1.37B952.18M
Total Liabilities
2.06B1.82B1.82B2.36B2.35B
Stockholders Equity
1.77B1.74B1.60B1.42B1.09B
Cash FlowFree Cash Flow
254.26M406.27M145.92M69.82M74.52M
Operating Cash Flow
476.80M580.71M406.30M303.67M202.50M
Investing Cash Flow
-217.51M-287.43M-261.38M-594.60M-73.94M
Financing Cash Flow
-301.91M-109.47M-407.89M-125.20M359.91M

American Eagle Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.80
Price Trends
50DMA
10.82
Negative
100DMA
12.05
Negative
200DMA
15.25
Negative
Market Momentum
MACD
-0.40
Positive
RSI
39.35
Neutral
STOCH
23.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Negative. The current price of 9.8 is below the 20-day moving average (MA) of 10.46, below the 50-day MA of 10.82, and below the 200-day MA of 15.25, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 39.35 is Neutral, neither overbought nor oversold. The STOCH value of 23.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEO.

American Eagle Risk Analysis

American Eagle disclosed 35 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 0 New Risks

American Eagle Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$1.47B29.3211.97%9.09%106.50%
FDFDP
73
Outperform
$1.56B10.627.51%3.69%-0.64%
WWWWW
68
Neutral
$1.45B20.1625.29%2.31%-13.05%
AEAEO
64
Neutral
$1.68B9.9312.19%5.15%-0.95%-10.51%
62
Neutral
$6.86B11.072.77%4.27%2.66%-24.95%
61
Neutral
$1.49B9.3531.35%1.45%59.09%
FLFL
56
Neutral
$2.30B194.63-12.85%-2.62%0.93%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AEO
American Eagle
9.80
-10.26
-51.15%
FL
Foot Locker
23.97
-1.14
-4.54%
FDP
Fresh Del Monte Produce
33.10
12.35
59.52%
WWW
Wolverine World Wide
17.43
4.60
35.85%
RVLV
Revolve Group
20.52
4.63
29.14%
VSCO
Victoria's Secret
18.38
-0.43
-2.29%

American Eagle Corporate Events

Stock BuybackDividendsFinancial Disclosures
American Eagle Boosts Q4 Profit Outlook and Returns
Positive
Jan 13, 2025

American Eagle Outfitters has announced an improved profit outlook for the fourth quarter of 2024, driven by better-than-expected holiday sales and growth across its brands, including American Eagle and Aerie. The company has revised its operating profit expectations to approximately $135 million, up from previous guidance, and has also reported significant shareholder returns through share repurchases and dividends.

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.