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American Eagle (AEO)
NYSE:AEO
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American Eagle
(NYSE:AEO)
71Outperform
Positive Factors
Marketing
Higher marketing investment focusing on digital and influencers should help drive demand.
Supply Chain
The nimbleness of the supply chain allows China sourcing exposure to decrease significantly.
Negative Factors
Earnings Guidance
Management guided FY25 operating income to be significantly below the Street expectations, indicating potential challenges in achieving previous growth targets.
Sales Performance
Sales have slowed at both brands, with a better performance at Aerie than American Eagle.
Tariffs
A $5-10mn adverse impact from U.S. tariffs on China is included in the guidance.
American Eagle (AEO) vs. S&P 500 (SPY)
Market Cap
$1.84B
Dividend Yield4.7%
Average Volume (3M)8.79M
Price to Earnings (P/E)6.3
Beta (1Y)0.86
Revenue Growth1.27%
EPS Growth96.32%
CountryUS
Employees9,000
SectorConsumer Cyclical
Sector Strength63
IndustryApparel - Retail
Share Statistics
EPS (TTM)1.68
Shares Outstanding172,514,100
10 Day Avg. Volume10,922,039
30 Day Avg. Volume8,789,324
Financial Highlights & Ratios
PEG Ratio0.07
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
$14.36Price Target Upside38.74% Upside
Rating ConsensusHold
Number of Analyst Covering12
American Eagle Business Overview & Revenue Model
Company DescriptionAmerican Eagle Outfitters, Inc. operates as a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. The company provides jeans, and specialty apparel and accessories for women and men; and intimates, apparel, activewear, and swim collections, as well as personal care products for women. It also offers graphic tees and other clothing products under the Tailgate brand name; and menswear products under the Todd Snyder New York brand name. As of January 29, 2022, the company operated 880 American Eagle stores, 244 Aerie brand stand-alone stores, and five Todd Snyder stores in the United States, Canada, Mexico, and Hong Kong. It also ships to 81 countries through its Websites; and offers its merchandise at 260 locations operated by licensees in 28 countries, as well as provides products through its Websites ae.com, aerie.com, and toddsnyder.com. American Eagle Outfitters, Inc. was founded in 1977 and is headquartered in Pittsburgh, Pennsylvania.
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 demonstrates a solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains reasonable leverage, although its equity ratio suggests some reliance on debt. The income statement reveals improved profit margins, while the cash flow statement underscores the company's ability to generate free cash flow effectively. Despite fluctuations in net income historically, the overall trajectory remains positive.Income Statement
American Eagle's income statement shows robust revenue growth with a 1.27% increase from 2024 to 2025. The gross profit margin is a strong 39.18%, and the net profit margin has improved to 6.18%. Both EBIT and EBITDA margins have shown improvement, indicating enhanced operational efficiency. However, the net income has fluctuated in prior years, which could be a concern for stability.72
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.82, showing a balanced use of debt and equity financing. The return on equity is at 18.64%, which is a positive indicator of profitability. However, the equity ratio stands at 46.13%, suggesting a moderate reliance on liabilities. Overall, the company's leverage is manageable, but it could increase the risk during periods of financial stress.68
Positive
Cash Flow
The cash flow statement highlights a strong free cash flow of $476.8 million, with a free cash flow growth rate of 17.34% from the previous year. The operating cash flow to net income ratio is 1.45, indicating good cash generation relative to net income. The free cash flow to net income ratio of 1.45 further underscores the company's solid cash position. This strong cash flow performance provides a cushion against financial volatility.75
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.33B | 5.26B | 4.99B | 5.01B | 3.76B |
| Gross Profit | ||||
| 2.09B | 2.02B | 1.75B | 1.99B | 1.15B |
| EBIT | ||||
| 427.30M | 222.72M | 247.05M | 591.07M | 288.31M |
| EBITDA | ||||
| 665.39M | 477.02M | 404.98M | 756.43M | -104.73M |
| Net Income Common Stockholders | ||||
| 329.38M | 170.04M | 125.14M | 419.63M | -209.27M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 358.96M | 454.09M | 170.21M | 434.77M | 850.48M |
| Total Assets | ||||
| 3.83B | 3.56B | 3.42B | 3.79B | 3.43B |
| Total Debt | ||||
| 1.45B | 1.19B | 1.37B | 1.81B | 1.80B |
| Net Debt | ||||
| 1.14B | 831.54M | 1.20B | 1.37B | 952.18M |
| Total Liabilities | ||||
| 2.06B | 1.82B | 1.82B | 2.36B | 2.35B |
| Stockholders Equity | ||||
| 1.77B | 1.74B | 1.60B | 1.42B | 1.09B |
| Cash Flow | Free Cash Flow | |||
| 476.80M | 406.27M | 145.92M | 69.82M | 74.52M |
| Operating Cash Flow | ||||
| 476.80M | 580.71M | 406.30M | 303.67M | 202.50M |
| Investing Cash Flow | ||||
| -217.51M | -287.43M | -261.38M | -594.60M | -73.94M |
| Financing Cash Flow | ||||
| -301.91M | -109.47M | -407.89M | -125.20M | 359.91M |
American Eagle Technical Analysis
Negative
10.35
Price Trends
12.56
Negative
14.74
Negative
17.33
Negative
Market Momentum
-0.58
Negative
43.33
Neutral
35.29
Neutral
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 10.35 is below the 20-day moving average (MA) of 11.35, below the 50-day MA of 12.56, and below the 200-day MA of 17.33, indicating a bearish trend. The MACD of -0.58 indicates Negative momentum. The RSI at 43.33 is Neutral, neither overbought nor oversold. The STOCH value of 35.29 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.48B | 29.95 | 12.04% | ― | 5.73% | 81.83% | |
71 Outperform | $1.84B | 6.34 | 18.80% | 4.70% | 1.27% | 96.32% | |
71 Outperform | $1.51B | 10.64 | 7.32% | 3.39% | -0.95% | ― | |
59 Neutral | $896.24M | 19.11 | 15.57% | 3.62% | -21.75% | ― | |
59 Neutral | $11.53B | 10.43 | -0.22% | 4.02% | 1.19% | -15.83% | |
58 Neutral | $1.28B | 8.28 | 31.30% | ― | 0.76% | 49.95% | |
57 Neutral | $1.08B | 91.29 | 0.62% | ― | -2.20% | ― |
* Consumer Cyclical Sector Average
Performance Comparison
AEO
American Eagle
10.35
-11.26
-52.11%
FL
Foot Locker
11.21
-10.31
-47.91%
FDP
Fresh Del Monte Produce
31.33
7.31
30.43%
WWW
Wolverine World Wide
11.06
1.71
18.29%
RVLV
Revolve Group
20.12
1.37
7.31%
VSCO
Victoria's Secret
16.28
-0.80
-4.68%
American Eagle Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -8.57% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted American Eagle Outfitters' strong financial performance in 2024, with record revenue and profit growth. However, the company faces challenges at the start of 2025, including a softer consumer environment, currency impacts, and ongoing challenges in specific product categories. The company's proactive strategies and confidence in long-term growth are notable.Highlights
Record Revenue Achievement
American Eagle Outfitters achieved record revenue of $5.3 billion, fueled by a 4% comparable sales growth, with strong performances across brands and channels.
Strong Operating Profit and Margin Expansion
Adjusted operating profit reached $445 million, marking a 19% increase from the previous year, with an operating margin expansion by 120 basis points to 8.3%.
Aerie's Continued Growth
Aerie's revenue crossed $1.7 billion with a 5% comparable sales increase, driven by double-digit growth in soft apparel and activewear.
Successful Shareholder Returns
Returned over $280 million to shareholders through buybacks and dividends, with plans to increase share repurchase authorization.
Denim Market Leadership
American Eagle maintained its number one ranking in denim with a mid-single-digit growth, reflecting strong traction in women's fashion.
Lowlights
Soft Start to 2025
The year 2025 began softer than anticipated, with first-quarter sales impacted by a less robust consumer environment and cold weather.
Challenges in Intimates and Swimwear
Aerie faced challenges in intimates and swimwear, industry-wide declines affecting performance despite some market share gains.
Currency and Tariff Impact
The strengthening U.S. dollar and tariffs created headwinds, with a $20 million adverse effect on operating income in 2025.
Store Traffic Decline
Significant decline in mall traffic affected store sales, although digital channels performed better.
Company Guidance
During the American Eagle Outfitters Fourth Quarter 2024 Earnings Conference Call, the company provided several key metrics and guidance for the upcoming fiscal year. In 2024, AEO achieved record revenue of $5.3 billion, with a 4% increase in comparable sales and an adjusted operating profit of $445 million, marking significant operating margin expansion. The fourth quarter saw a 3% growth in comparable sales and an operating income of $142 million, the highest in over a decade. AEO returned over $280 million to shareholders through buybacks and dividends, with plans to increase share repurchase authorization in 2025. However, the year started softer than anticipated due to a less robust consumer environment and cold weather, leading to an expected decline in full-year revenue and operating income. The company is taking proactive measures to drive expense savings and improve performance, focusing on brand amplification, operational optimization, and financial discipline. For the first quarter, revenue is projected to decline mid-single digits, with operating income between $20 million and $25 million. For the full year, revenue is expected to decrease in the low-single-digits, with operating income ranging from $360 million to $375 million, factoring in currency headwinds and tariffs. Capital expenditures for 2025 are estimated at $300 million, with a focus on store remodels and digital platform enhancements.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.