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American Eagle (AEO)
NYSE:AEO
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American Eagle
(NYSE:AEO)
69Neutral
Positive Factors
Brand Performance
Better-than-expected holiday results were led by Aerie, particularly in the apparel and Offline businesses which were up double digits.
Financial Performance
American Eagle Outfitters reported positive holiday results with operating profit guidance raised to $135 million.
Negative Factors
Guidance and Forecasts
Management lowered its sales and EBIT guidance following underperformance and inconsistency in the digital channel.
American Eagle (AEO) vs. S&P 500 (SPY)
Market Cap
$2.21B
Dividend Yield4.35%
Average Volume (3M)4.51M
Price to Earnings (P/E)10.4
Beta (1Y)0.99
Revenue Growth6.38%
EPS Growth6.08%
CountryUS
Employees43,100
SectorConsumer Cyclical
Sector Strength50
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)1.17
Shares Outstanding192,101,780
10 Day Avg. Volume5,910,631
30 Day Avg. Volume4,505,852
Financial Highlights & Ratios
PEG Ratio1.70
Price to Book (P/B)N/A
Price to Sales (P/S)0.43
Price to Cash Flow (P/CF)11.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.56Price Target Upside44.63% Upside
Rating ConsensusHold
Number of Analyst Covering9
American Eagle Business Overview & Revenue Model
Company DescriptionAmerican Eagle Outfitters, Inc. is a multi-brand specialty retailer. It offers an assortment of apparel and accessories for men and women under the American Eagle Outfitters brand, and intimates, apparel and personal care products for women under the Aerie brand. The firm operates stores in the United States, Canada, Mexico, Hong Kong, China and the United Kingdom. It also acquired two emerging brands to complement its existing brands, Tailgate, a vintage sports-inspired apparel brand, and Todd Snyder New York, a premium menswear brand. The company was founded in 1977 and is headquartered in Pittsburgh, PA.
How the Company Makes MoneyAmerican Eagle Outfitters generates revenue primarily through the sale of apparel, accessories, and personal care products under its American Eagle and Aerie brands. The company operates a substantial number of retail stores across various regions, which serve as a significant revenue stream. Additionally, AEO has a strong online presence, with its e-commerce platform contributing significantly to its overall sales. The company's revenue is further bolstered by strategic partnerships and collaborations, exclusive product offerings, and marketing initiatives aimed at enhancing brand loyalty. AEO's focus on maintaining a diverse and appealing product lineup helps drive customer engagement and repeat purchases, thus sustaining its earnings.
American Eagle Financial Statement Overview
Summary
American Eagle's financial performance is stable with a solid income statement showing positive revenue growth and a strong gross profit margin. The balance sheet and cash flow analysis indicate manageable leverage and strong cash generation, though there is room for improvement in profitability and operational efficiency.Income Statement
The income statement of American Eagle shows a solid performance with a gross profit margin of 36.9% and a net profit margin of 4.3% for the TTM period. Revenue growth is positive at 2.7% compared to the previous year, indicating a growth trajectory. However, EBIT and EBITDA margins are moderate at 7.7% and 10.1% respectively, suggesting room for improvement in operational efficiency.75
Positive
Balance Sheet
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.8, showcasing manageable leverage. The equity ratio stands at 46.7%, reflecting a balanced capital structure. However, return on equity is relatively low at 13.2%, which indicates moderate profitability for shareholders.68
Positive
Cash Flow
Cash flow analysis reveals a positive free cash flow growth rate of 31.8% TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.68, indicating good cash flow efficiency. Nonetheless, the free cash flow to net income ratio of 0.83 suggests some room for improvement in converting income into free cash flow.70
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.17B | 5.26B | 4.99B | 5.01B | 3.76B | 4.31B | Gross Profit |
| 1.14B | 2.02B | 1.75B | 1.99B | 1.15B | 1.52B | EBIT |
| 231.17M | 222.72M | 247.05M | 591.07M | 288.31M | 394.33M | EBITDA |
| 367.47M | 477.02M | 404.98M | 756.43M | -104.73M | 427.50M | Net Income Common Stockholders |
| 181.90M | 170.04M | 125.14M | 419.63M | -209.27M | 191.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 160.19M | 454.09M | 170.21M | 434.77M | 850.48M | 416.93M | Total Assets |
| 3.74B | 3.56B | 3.42B | 3.79B | 3.43B | 3.33B | Total Debt |
| 1.39B | 1.19B | 1.37B | 1.81B | 1.80B | 1.60B | Net Debt |
| 1.23B | 831.54M | 1.20B | 1.37B | 952.18M | 1.24B | Total Liabilities |
| 1.99B | 1.82B | 1.82B | 2.36B | 2.35B | 2.08B | Stockholders Equity |
| 1.75B | 1.74B | 1.60B | 1.42B | 1.09B | 1.25B |
| Cash Flow | Free Cash Flow | ||||
| 193.65M | 406.27M | 145.92M | 69.82M | 74.52M | 205.06M | Operating Cash Flow |
| 330.65M | 580.71M | 406.30M | 303.67M | 202.50M | 415.42M | Investing Cash Flow |
| -109.34M | -287.43M | -261.38M | -594.60M | -73.94M | -174.89M | Financing Cash Flow |
| -235.14M | -109.47M | -407.89M | -125.20M | 359.91M | -211.23M |
American Eagle Technical Analysis
Negative
11.45
Price Trends
15.04
Negative
16.73
Negative
18.64
Negative
Market Momentum
-1.00
Positive
26.19
Positive
11.59
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEO, the sentiment is Negative. The current price of 11.45 is below the 20-day moving average (MA) of 13.18, below the 50-day MA of 15.04, and below the 200-day MA of 18.64, indicating a bearish trend. The MACD of -1.00 indicates Positive momentum. The RSI at 26.19 is Positive, neither overbought nor oversold. The STOCH value of 11.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEO.
American Eagle Risk Analysis
American Eagle disclosed 35 risk factors in its most recent earnings report. American Eagle reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Eagle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.00B | 12.41 | 17.56% | ― | 7.71% | 40.01% | |
74 Outperform | $3.96B | 7.15 | 47.77% | ― | 15.60% | 71.45% | |
72 Outperform | $42.45B | 20.36 | 40.28% | 1.14% | 3.69% | 13.71% | |
69 Neutral | $2.21B | 10.36 | 13.28% | 4.35% | 6.38% | 6.08% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% | |
33 Underperform | $94.10M | ― | -521.67% | ― | -10.65% | -129.52% |
* Consumer Cyclical Sector Average
Performance Comparison
AEO
American Eagle
11.45
-11.19
-49.43%
ANF
Abercrombie Fitch
76.52
-49.45
-39.26%
ROST
Ross Stores
126.52
-19.13
-13.13%
PLCE
Children's Place
7.10
-7.70
-52.03%
URBN
Urban Outfitters
52.97
11.05
26.36%
American Eagle Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: 0.00% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call presented a mostly positive outlook for American Eagle Outfitters, with record revenue, strong performance from the Aerie brand, and digital growth contributing significantly to the positive sentiment. The company also showed improvement in operating income and gross margin, along with a strong balance sheet and raised income guidance. However, there were concerns over increased SG&A expenses and challenges in the AE men's category. Despite these challenges, the overall sentiment leans positive due to the significant achievements and strategic advancements.Highlights
Record Third Quarter Revenue
Third quarter revenue reached a record of $1.3 billion, driven by 5% comparable sales growth.
Aerie's Exceptional Performance
Aerie achieved 12% revenue and comparable sales growth, with profits expanding by 34%.
Digital Channel Growth
The digital channel grew by 10%, showing strong momentum and improved e-commerce performance.
Strong Operating Income
Operating income for the third quarter was $125 million, reflecting a 9.6% operating margin.
Gross Margin Expansion
Gross margin increased 310 basis points from last year, reaching 41.8%.
Healthy Balance Sheet
The company ended the quarter with $241 million in cash, nearly $900 million in total liquidity, and no debt.
Increased Full Year Operating Income Guidance
The full year operating income guidance was raised to the high end of the prior range, now expected between $340 million and $350 million.
Lowlights
SG&A Expense Increase
SG&A expenses were up 16% from last year, driven by incentive expenses and higher payroll costs.
Impact of Clearance Strategy Change
The change in clearance strategy resulted in a 1-2 point headwind to revenue for the quarter.
Challenges in AE Men's Category
The men's category in American Eagle was softer compared to women's, presenting an area for improvement.
Company Guidance
In the recent earnings call, American Eagle Outfitters (AEO) provided a comprehensive overview of its third-quarter 2023 performance and strategic guidance. The company reported record third-quarter revenue of $1.3 billion, with a 5% increase in comparable sales, demonstrating strong brand momentum. Aerie led with a notable 12% growth in revenue and comparable sales, while American Eagle saw a 2% increase in both metrics. Digital sales were a standout, growing 10% under the leadership of the new Head of Digital, David Zhang. The company achieved its second-highest third-quarter gross margin and operating income in over a decade, with a gross margin of 41.8%, up 310 basis points from the previous year. Operating income was $125 million, reflecting a 9.6% operating margin. AEO highlighted its commitment to inventory discipline and promotional strategies, which contributed to improved profit margins. Additionally, the company raised its full-year operating income guidance to between $340 million and $350 million, reflecting sustained growth and efficiency improvements. Looking ahead, AEO plans to continue strategic investments in its brands and supply chain, with new leadership appointments aimed at enhancing operational excellence.American Eagle Corporate Events
Stock BuybackDividendsFinancial Disclosures
American Eagle Boosts Q4 Profit Outlook and Returns
Positive
Jan 13, 2025
American Eagle Outfitters has announced an improved profit outlook for the fourth quarter of 2024, driven by better-than-expected holiday sales and growth across its brands, including American Eagle and Aerie. The company has revised its operating profit expectations to approximately $135 million, up from previous guidance, and has also reported significant shareholder returns through share repurchases and dividends.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.