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American Eagle Outfitters Is Winning Gen Z—And Digital Sales Are Surging!

American Eagle Outfitters, Inc. (AEO) presented a mixed financial performance for the third quarter of 2025. The company’s total revenue showed a positive growth trajectory, climbing by 6% to achieve a quarterly record of $1.4 billion. Notably, this was driven partly by a return to positive comparable sales, which increased by 4% and marked a meaningful improvement from a previous 1% decline. AEO’s operating income exceeded expected levels, reaching $113 million against a guidance range of $95 million to $100 million, bolstered by increased demand and efficient cost management. However, the company’s gross margin showed a slight decline of 40 basis points to 40.5%, reflecting an impact from tariffs amounting to approximately $20 million. On the brand front, Aerie stood out with an impressive 11% increase in comparable sales, indicative of strong demand across a broad spectrum of categories such as intimates, apparel, and sleepwear.