American Eagle Outfitters Stock Soars After Strong Earnings: Can AEO’s 120% Rally Keep Going?
American Eagle Outfitters Stock: American Eagle Outfitters (AEO) extended its powerful bull run on Tuesday as the stock jumped from $20.80 at the close to $22.80 in after-hours trading, fueled by impressive earnings and a stronger outlook for the upcoming quarter. The apparel retailer, which owns the American Eagle, Aerie, and Offline brands, delivered results that outperformed Wall Street expectations sending investor confidence sharply higher.
Viral Celebrity Campaigns Driving Major Traffic
AEO’s resurgence is partly tied to its headline-making marketing campaigns featuring Travis Kelce, Sydney Sweeney, and Martha Stewart. While some campaigns sparked controversy online, they successfully boosted both digital and in-store foot traffic.
According to the company’s CFO, the campaigns delivered a large surge in online visitors. The traffic we’re seeing digitally off of those campaigns is significant… that’s where we’re seeing a lot of the gains.
Revenue Beats Expectations
For the quarter, American Eagle reported $1.36 billion in revenue, up from $1.28 billion a year ago. Its nine-month revenue also rose slightly to $3.735 billion, showing resilience despite inflation and volatile consumer sentiment.
• American Eagle revenue: $853 million
• Aerie revenue: $461 million
• Other segment: down to $54 million
The retailer continues to perform strongly even as inflation hovers near 3% and consumer confidence softens. Analysts point out that middle and upper-income shoppers — key demographics for AE and Aerie remain willing to spend thanks to rising wages and a booming stock market.
Tariff Pressure and the Trump Impact
AEO noted it is paying more in tariffs due to policy decisions enacted under former President Donald Trump. The company expects tariffs to cost around $70 million this year, yet it still managed to outperform expectations.
Boosted Guidance Fuels More Optimism
With demand staying strong through the holiday season, American Eagle upgraded its forward guidance. For Q4, it now expects:
• Comparable sales: +8% to +9%
• Operating income: $155 million to $160 million
The upbeat forecast follows similar momentum across the retail sector. Abercrombie & Fitch recently jumped 50% after earnings, Gap Inc. climbed over 60% from yearly lows, and Urban Outfitters surged from $60 to $80.
AEO Stock Price Analysis: More Upside Ahead?
AEO stock has skyrocketed 120% in the past five months, outperforming the S&P 500 by a wide margin. Analyst Eric Balchunas noted humorously on X (Twitter) that the stock’s explosive run happened “since Sydney Sweeney blessed the brand.”
Technical charts show
• AEO has broken the key resistance level at $20.30, invalidating a bearish double-top pattern.
• The price has moved above the 78.6% Fibonacci retracement level.
• A bullish Super trend signal supports further gains.
With momentum on its side, analysts say the next major target is $25, roughly 20% above the current price.
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