American Eagle Outfitters experienced a significant stock decline following the release of its second-quarter financial report, which revealed a 1 percent decrease in comparable sales for its core brand. This downturn occurred despite a reported 8 percent increase in overall sales, reaching $1.38 billion, and a rise in profit to $134.1 million, or 79 cents per share, compared to $77.6 million, or 45 cents per share, in the previous year.
The company's sister brand, Aerie, continued its strong performance, with comparable sales surging by 19 percent. However, this success was overshadowed by the struggles of the American Eagle brand, which has seen its comparable sales fall. The company also reported higher than desired inventory levels.
The financial results arrive amidst ongoing discussions surrounding American Eagle's marketing campaigns, including its fall 2025 advertising featuring actor Sydney Sweeney. Previous campaigns have generated both attention and controversy, including a widely debated marketing message about genetics that sparked debate on social media and even drew commentary from President Donald Trump. While those campaigns reportedly helped restore relevance to the brand in a competitive apparel market, the latest figures suggest a need to convert attention into consistent sales growth.
"The second quarter reflects the value of our AEO Inc portfolio, led by the broad-based momentum of Aerie and OFFLINE, alongside encouraging progress at American Eagle," said CEO Jay Schottenstein. He added, "Looking ahead to the second half, we are committed to building on the continued momentum in Aerie and OFFLINE, accelerating improvement at American Eagle, and unlocking greater consistency and profitability across the business."
American Eagle also disclosed receiving $196 million in tariff refunds, including interest, which contributed $161 million to its net income for the quarter. As of the reporting period, American Eagle operates 802 storefronts globally, with Aerie locations numbering 335.