Total comparable sales increased 8 per cent during the quarter ended May 2, 2026. Aerie delivered record first-quarter revenue with comparable sales surging 25 per cent and trailing 12-month revenue surpassing $2 billion. In contrast, comparable sales at the American Eagle brand declined 2 per cent.
American Eagle Outfitters (AEO) has reported record Q1 FY26 revenue of $1.2 billion, up 10 per cent YoY, led by Aerie’s 25 per cent comparable sales growth.
Operating profit reached $28 million against last year’s loss, while gross margin expanded to 38.2 per cent.
Despite macroeconomic uncertainty and tariff pressures, AEO reaffirmed its FY26 operating income guidance of $390-410 million.
“We entered 2026 with strong momentum, delivering double-digit top-line growth and operating income ahead of guidance. This quarter reflected the strength of our portfolio and the power of Aerie,” said Jay Schottenstein, executive chairman of the Board and CEO of AEO Inc.
Margins strengthen amid inventory normalisation
The gross profit rose 41 per cent to $456 million from $322 million in the same quarter last year, while gross margin expanded 860 basis points to 38.2 per cent. Merchandise margins improved 710 basis points (bps), largely reflecting the absence of last year’s $75 million inventory writedown, AEO said in a press release.
Selling, general and administrative (SG&A) expenses increased 11 per cent to $376 million due to planned advertising investments.
The company reported operating profit of $28 million compared to an operating loss of $85 million in the prior-year quarter. Diluted earnings per share (EPS) improved to $0.14 from a loss of $0.36 last year.
Inventory at the end of the quarter increased 27 per cent to $817 million, with unit inventory rising 5 per cent.
Capital expenditure during the quarter stood at $61 million, while FY26 capital spending is expected to range between $250 million and $260 million.
FY26 guidance maintained despite macro uncertainty
For the second quarter (Q2) FY26, AEO expects comparable sales growth in the mid-to-high single-digit range and operating income between $45 million and $50 million.
For FY26, the company reiterated guidance for mid-single-digit comparable sales growth and operating income of $390 million to $410 million despite continued macroeconomic and consumer uncertainty.
The outlook assumes a tariff rate of 10 per cent for second-quarter receipts and 15 per cent for the second half of the FY26, excluding any impact from International Emergency Economic Powers Act tariff refunds.
Fibre2Fashion News Desk (SG)
