Saad Ullah
⬤ American Eagle Outfitters shares took a hit in premarket trading despite the company posting solid fourth-quarter numbers and raising guidance. The retailer reported Q4-to-date comparable sales through January 3 were up high single digits, but AEO stock dropped more than 7% ahead of the market open, trading around $24.75 down from its previous close near $26.82.
⬤ The company now projects consolidated comparable sales growth of 8% to 9% for the quarter. Here's the breakdown: the American Eagle brand saw comps up low single digits, while Aerie crushed it with comparable sales jumping into the low 20% range. The numbers show Aerie continues to be the powerhouse driving growth, with steady demand across the broader brand portfolio throughout the holiday season.
⬤ American Eagle bumped up its fourth-quarter operating income guidance to $167-$170 million from the previous forecast of $155-$160 million, citing solid margin performance. But there's a catch—management noted the guidance still factors in roughly $50 million of tariff-related pressure, showing cost headwinds remain a real concern. Despite the improved outlook, the stock couldn't shake off the premarket selloff, sliding approximately 7.7%.
⬤ The market reaction shows how apparel retail stocks can swing hard even when the fundamentals look better. American Eagle delivered stronger comps and raised income targets, yet the premarket drop reflects investor sensitivity to expectations and broader retail sector jitters. The focus now shifts to how sales momentum, margins, and those tariff costs play out in shaping the stock's near-term direction.
Saad Ullah
