American apparel retailer, American Eagle, reports a second-quarter profit of $77.6 million, reaffirming its annual earnings outlook.

American Eagle Reports Q2 Results, Outlines Growth Strategy

American Eagle Outfitters, Inc. has released its second-quarter financial results, showcasing a mixed performance amidst ongoing efforts to boost growth and maintain brand relevance.

In the second quarter, the company's revenue contracted by 1% to $1.283 billion, compared to the same period last year. Despite the decline, American Eagle remains optimistic about the future, anticipating improved performance in the subsequent quarters.

The gross margin for the quarter stood at 38.9%, marking a 30 basis points increase from 2024, thanks to lower markdowns. Operating income for the quarter increased by 2% to $103 million, with an operating margin of 8%.

American Eagle's comparable sales took a 1% dip in the second quarter, with the main brand, American Eagle, experiencing a 3% decrease. However, the company's subsidiary, Aerie, saw a 3% increase in comparable sales during the same period.

The company's net income for the quarter remained steady at $77.6 million, comparable to the same period in 2024. American Eagle also distributed $43 million in dividends during the semester.

In an attempt to attract younger customers and stay competitive in a more moderate consumption environment, American Eagle has intensified its marketing efforts. This includes a controversial denim campaign with actress Sydney Sweeney, collaborations with Coco Gauff and Jenna Ortega, and the announcement of its engagement with singer Taylor Swift.

Besides partnering with Taylor Swift, American Eagle has also teamed up with NFL player Travis Kelce's Tru Kolors as part of its strategy to expand its reach. However, there are no specific other major brand partnerships reported in the last six months.

American Eagle has also been active in share buybacks, investing $231 million during the semester, which reduced the outstanding capital by 10%.

Looking ahead, American Eagle has raised its forecasts for the third quarter and the full year after reporting its second-quarter results. The company expects adjusted operating income of between $255 million and $265 million for the full year.

As of the quarter-end, American Eagle operated 1,185 owned stores and 365 licensed points of sale abroad. The company did not provide specific numbers for its forecasts but mentioned an increase compared to its previous projections.

These financial results and growth strategies underscore American Eagle's commitment to navigating the retail landscape and positioning itself for long-term success.