American Eagle Outfitters
American Eagle: Mixed Bag
The apparel company's intimate line, Aerie, remains the highlight, Nikic said.
"AEO remains a tale of two brands, with Aerie remaining red-hot, but the larger American Eagle brand is still a bit of a mixed bag," Nikic said.
The analyst said the company will face tougher comparable sales in the second half of the fiscal year, alongside a "volatile macro environment."
"We remain in wait-and-see mode here," he added.
Second-quarter results showed earnings per share beating estimates, with tariff refunds providing an estimated 50-cent-per-share benefit - a net gross of $179 million and a $161 million net operating income benefit.
But American Eagle's earnings per share would still have beaten estimates without the refund. The company also beat analyst estimates for revenue.
Aerie is the Big Positive
Nikic highlighted poor results from the women's segment of the American Eagle brand, particularly with pants and shorts.
The positives in the quarter were the American Eagle brand men's segment posting its fourth straight quarter of positive comps and the Aerie brand posting 19% comp growth year-over-year.
Nikic said the Pittsburgh-based company's real test could be the upcoming Aerie comps in the third and fourth quarters.
"Aerie is one of the strongest growth stories in retail at the moment, but it faces difficult compares, and the outlook for the core American Eagle brand is unclear."
Price Action
AEO shares are down 13.2% to $14.64 on Thursday. The stock hit an intraday low of $14.14, nearing the 52-week low of $14.06 set back on Oct. 10.
The Jay Schottenstein-led company's stock is down 44% year to date in 2026.
