American Eagle shares jumped 11.1% after hours on Tuesday (Wednesday AEDT) after the company raised its full-year forecast following better-than-expected Q3 earnings.
The clothing company saw total revenue increase by 6% to a record US$1.4 billion, driven by a total comparable sales increase of 4%with positive increases across all brands.
Aerie led the growth with comparable sales rising by 11%. American Eagle comparable sales increased by 1%.
Earnings per share came in at 53 cents and surpassed expectations of 44 cents per share.
This also beat the 41 cents per share the company reported the same time last year.
These Q3 earnings are the first time investors are seeing a full quarter of impact from American Eagle’s campaigns with Sydney Sweeney and Travis Kelce.
American Eagle told CNBC that the campaigns are “attracting more customers” and creating more attention around the brand, but the results show they have not yet been a major revenue driver.
American Eagle’s operating margin reached 8.3%, which surpassed analysts' expectations of 7.5%.
Following a strong third quarter, American Eagle executive chairman of the board and CEO, Jay Schottenstein, said this strong momentum has continued into the fourth quarter, with an excellent start to the holiday season.
“We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and Offline,” he said.
“We are focused on finishing the season strong and sustaining our success into 2026 and beyond.”
American Eagle has also raised guidance for the fourth quarter.
Based on strong sales trends, it now expects comparable sales of 8% and 9%, around four times higher than analysts' expectations of 2.1%.
It is also expecting full-year adjusted operating income to be between US$303 million and US$308 million, up from the previously forecasted range of US$255 million to US$265 million.
