American Eagle Outfitters reported a 1% decrease in net revenue and total comparable sales during Q2 FY25, exceeding revenue expectations by 4.07%. Aerie line sales rose by 3% while American Eagle saw a 3% decline. Gross profit slightly increased to $499.96m, with a gross margin of 38.9%.

Operating profit increased by 2% to $103.09m, with net income rising marginally to $77.63m. Diluted earnings per share grew by 15% to $0.45. Inventory levels increased by 8% to $718m due to tariff impacts. The company completed a $200m share repurchase agreement.

American Eagle Outfitters anticipates low single-digit growth in comparable sales but predicts a decline in gross margin. Tariff impact guidance for Q3 is $20m and $40m to $50m for Q4. Operating income for Q3 is projected to be between $95m and $100m, with adjusted operating income for the full year forecasted at $255m to $265m.

CEO Jay Schottenstein highlighted positive results for Q2, driven by demand, lower promotions, and improved expense management. The company’s iconic brands, including Aerie, contributed to the second-highest enterprise revenues in the second quarter’s history. Share repurchase and capital expenditure plans remain on track for the fiscal year.

Read more at Yahoo Finance: American Eagle Outfitters beats Q2 estimate, predicts tariff impact