American Eagle Outfitters reports 20% increase in Aerie's sales, attributing it to strong demand for denim and lingerie products.

In the dynamic world of retail, American Eagle Outfitters and its subsidiary, Aerie, are making waves, positioning themselves as market leaders and gaining significant market share.

The third quarter of 2025 saw American Eagle's net revenue increase by 6%, reaching an impressive $1.07 billion. Gross profit also rose by 2% to $407 million. However, the gross margin rate took a slight dip, decreasing to 38.2% from 39.8%. As a rate to revenue, operating income for the quarter fell to 9.7%, with the operating income dropping to $103 million. Despite this, net income for the quarter still managed to reach $80.8 million.

American Eagle has been investing heavily in its denim offerings, aiming to solidify its position as a market leader for jeans. This strategy seems to be paying off, as the brand saw a 2% increase in comparable sales.

Meanwhile, Aerie, the lingerie and apparel brand, experienced a remarkable 20% increase in comparable sales. This success has been attributed to an offering that resonates with consumers, well-designed stores, and marketing focused on real people.

The growth of both brands is particularly noteworthy given the challenging retail environment. Victoria's Secret, a long-time competitor, is reportedly losing customers and market share to Aerie.

In a bid to further expand, American Eagle opened six new stores during the third quarter, ending with 945 total stores, including 170 Aerie side-by-side locations. The company also opened 12 new Aerie stand-alone stores and closed one, ending with 142 stand-alone locations.

GlobalData Retail suggests that American Eagle may become a destination for lingerie as well. The company is already experiencing success in this area, with Aerie's growth trajectory showing no signs of slowing down.

Traffic to American Eagle stores has been robust, according to Chad Kessler, brand president. The success of the company is attributed to its strong apparel offerings, well-designed stores, and a focus on real people in its marketing.

In addition, American Eagle is looking to expand globally. The company ended the third quarter with 241 licensed stores, up from 223 the previous year. However, the company is facing inventory issues in the fourth quarter, primarily due to product misses in tops and uncooperative weather.

In conclusion, American Eagle and Aerie are thriving amidst a challenging retail landscape, demonstrating a strong commitment to innovation, quality, and customer satisfaction.