AEO Stock Forecast & Price Target

American Eagle Outfitters has demonstrated consistent growth, with total comparable sales up 3% year-over-year and a notable strength in the AE Women’s category, particularly in denim and dresses. The company achieved an operating margin of 8.9%, exceeding market expectations, highlighting effective management of selling, general, and administrative expenses while maintaining a strong gross margin of 37.3%. Looking ahead to FY25, the outlook is positive with anticipated topline growth and continued expansion of operating margins.

American Eagle Outfitters is anticipating a mid-single-digit decline in revenue year-over-year for the first quarter, which is significant as it underperforms the previous consensus estimate of a slight increase. The company reported a consolidated revenue of approximately $1.605 billion for the fourth quarter, reflecting a year-over-year decline of 4.4%, and management has updated their full-year guidance to project a low-single-digit decline, falling short of prior consensus expectations. Additionally, the forecasted operating income for FY25 is substantially lower than prior estimates, with guidance indicating a range of $360 million to $375 million, which demonstrates ongoing challenges in maintaining profitability amidst rising costs and declining sales metrics.