American Eagle stock soars 16%, outlook up on record Black Friday

Its partnership with actress Sydney Sweeney is paying off.

American Eagle Outfitters (NYSE: AEO) stock was flying high on Wednesday, up about 16% after the company beat third quarter earnings estimates and raised its guidance for Q4 and the full fiscal year.

It was a blowout quarter for the clothing retailer as it generated record revenue. The company also posted record sales over its Black Friday Thanksgiving weekend.

• Revenue: $1.36B, up 6% year-over-year. This beat estimates of $1.32B.
• Comparable store sales rose 4% year-over-year.
• Net income: $91.3M, up 14% year-over-year.
• Earnings: 53 cents per share, up 29% year-over-year. This crushed estimates of 44 cents per share.

American Eagle generates revenue from its two major brands, American Eagle and Aerie. The American Eagle brand saw revenue increase by about 3% to $854 million. The Aerie brand saw revenue increase by about 13% to $462 million.

Further, while overall comparable store, or same store, sales were up 4%, most of this came from Aerie, which saw comp sales grow 11%. American Eagle comp sales increased 1%.

“I’m extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations—all having a positive impact. Record third quarter revenue was highlighted by Aerie’s double-digit comparable sales increase and positive growth at American Eagle, contributing to results that exceeded expectations,” Jay Schottenstein, executive chairman and CEO of American Eagle, said.

Big Thanksgiving weekend boosts outlook

American Eagle raised its guidance based on the unexpectedly strong Q3 and its record results over the Thanksgiving Black Friday weekend.

“Strong momentum has continued into the fourth quarter, including 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,” Schottenstein said. “We are focused on finishing the season strong and sustaining our success into 2026 and beyond.”

For the fourth quarter, American Eagle lifted its comp sales expectations to 8% to 9% growth, up from low single-digits previously. The operating income guidance was boosted to $155M to $160M, up from $125M to $130M previously.

For the fiscal year, the outlook for adjusted operating income is now $303M to $308M up from the previous range of $255M to $265M. The comparable store sales guidance was raised to the low single digits for the full year, up from the previous outlook that projected flat comp sales.

Sydney Sweeney and Travis Kelce boost sales

The company attributes some of the success to its advertising and marketing partnerships with celebrities Sydney Sweeney and Travis Kelce.

“By collaborating with high-profile partners who are defining culture, we are attracting more customers and have more eyes on the brand than ever before. Combined, the Sydney Sweeney and Travis Kelce partnerships have garnered more than 44 billion impressions,” Judy Meehan, head of investors relations, said on the earnings call.

That was more than expected. Jean sales, in particular, have spiked and the partnership with Sweeney to promote jeans has “certainly accelerated some of that,” Jen Foyle, president and executive creative director at the company, said.

The line of Sydney Sweeney jeans the brand offered sold out in two days, Schottenstein said.

With the launch of the Sydney Sweeney [jeans] and actually Travis Kelce, we couldn’t really keep up with that demand,” Schottenstein said on the call.

American Eagle stock got several price target upgrades post-earnings, including UBS, which raised its target to $31 per share, Telsey, which lifted it to $25, and Morgan Stanley, which raised it to $23 per share.

After today’s surge, American Eagle stock was trading at $24 per share. It is up 44% YTD and is trading at 14 times forward earnings.