Highlights

  • Second quarter Fiscal 2026 revenue was $1.380 billion, compared with $1.284 billion; Aerie revenue rose 25% and American Eagle 1%.
  • Operating income was $211 million, including $196 million of tariff refunds, partly offset by $35 million of incentive expense.
  • Diluted earnings per share were $0.79, including a $0.52 benefit from net tariff refunds, compared with $0.45 last year.
  • Operating income guidance is $110 million to $115 million for the third quarter and $540 million to $550 million for Fiscal 2026.

American Eagle Outfitters (NYSE: AEO) shares were trading at USD 19.67 on October 27, 2026, up 4.57%, with a relative volume at time of 2.66. The specialty retailer amended its credit facility on June 4, 2026, received IEEPA tariff refunds during the 26 weeks ended August 1, 2026, and filed its quarterly report for the second quarter of Fiscal 2026 on September 10, 2026.

American Eagle Outfitters is incorporated in Delaware and lists its principal executive offices in Pittsburgh, Pennsylvania. It offers clothing, accessories and personal care products under the American Eagle and Aerie brands, which are its two reportable segments. The company operates stores in the United States, Canada and Mexico, and its merchandise is available in more than 30 countries through license partners. At August 1, 2026, it had 1,167 owned stores and 376 international licensed retail stores.

Second Quarter Results

For the 13 weeks ended August 1, 2026, total net revenue was $1,380,375 thousand, compared with $1,283,675 thousand. Total comparable sales increased 6%, with a 19% increase at Aerie and a 1% decrease at American Eagle. Gross profit was $672,064 thousand, or 48.7% of revenue, compared with $499,962 thousand, or 38.9%. Gross profit included tariff refunds of $192 million, partly offset by $13 million of incentive expense.

Operating income was $211,405 thousand, compared with $103,085 thousand. The company said net tariff refunds of $161 million contributed 1,170 basis points of operating margin expansion.

Interest expense, net, was $47,125 thousand, compared with $1,919 thousand, and the company said it consists primarily of interest related to the Participation Agreement for tariff refund claims. Net income attributable to AEO was $134,084 thousand, compared with $77,633 thousand. Diluted net income per share was $0.79, compared with $0.45.

For the 26 weeks, net income attributable to AEO was $157,607 thousand, or $0.92 per diluted share, compared with $12,734 thousand, or $0.07.

Tariff Refunds and Participation Agreement

The filing states that on February 20, 2026, the U.S. Supreme Court held that the imposition of tariffs under the International Emergency Economic Powers Act was unlawful. As of August 1, 2026, the company had received $195.7 million of IEEPA tariff refunds, including interest, recognized primarily as a reduction of cost of sales.

Before the ruling, the company sold a portion of its refund claims to a third-party buyer under a Participation Agreement. The company paid $70.8 million related to that agreement during the 13 weeks ended August 1, 2026. The filing states that tariff uncertainty remains.

Balance Sheet, Cash Flow and Capital

At August 1, 2026, cash and cash equivalents were approximately $148.0 million, and working capital was $497,295 thousand. Borrowings under its $700 million asset-based revolving credit facility, which now expires on June 4, 2031, were $55.0 million, and the company stated it was in compliance with the Credit Agreement.

For the 26 weeks, cash provided by operating activities was $116,325 thousand, compared with cash used of $26,859 thousand. Capital expenditures were $127.6 million. Financing activities included $53.5 million of share repurchases and $41.9 million of dividends, partly offset by $55 million of net credit facility borrowings.

Outlook

On the earnings call, management said it expects third quarter comparable sales growth in the mid- to high single digits, with Aerie and OFFLINE in the high teens to 20% range and American Eagle approximately flat. It expects third quarter operating income of $110 million to $115 million, with selling, general and administrative expense up in the high single digits. For Fiscal 2026, management expects operating income of $540 million to $550 million, inclusive of net tariff refund benefits, based on consolidated comparable sales growth in the mid-single digits. The 10-Q states that the company expects Fiscal 2026 capital expenditures of $250 million to $260 million.