| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 95 | 7.8x | 17.8x | Top tier | |
Growth | 47 | 9.2% | 7.1% | Around median | |
Quality | 71 | 9.0% | 4.5% | Top tier | |
Safety | 68 | 3.0x | 2.6x | Top tier | |
Capital Return | 36 | 3.33% | 2.12% | Bottom tier | |
Momentum | 27 | 45.5% | 2.9% | Bottom tier | |
Sentiment | 42 | 5 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
American Eagle Outfitters operates an apparel portfolio led by American Eagle and Aerie, with Aerie including the OFFLINE brand. The company generates sales through stores and digital channels and from categories that include denim, tops, and bottoms at American Eagle, and apparel, intimates, sleepwear, and activewear at Aerie and OFFLINE. In Q2 fiscal 2026, Aerie and OFFLINE generated approximately $536 million in revenue, or about 38% of group revenue, while their revenue rose 25% and comparable sales grew 19%; by contrast, American Eagle revenue increased 1% and comparable sales declined 1%.
In Q2 fiscal 2026, group revenue increased 8% to $1.4 billion, comparable sales grew 6%, net income reached $134.1 million, and earnings per share were $0.79. Gross profit reached $672.1 million, and the company reported a gross margin of 48.7%, up 980 basis points, but tariff refunds added $179 million and 1,300 basis points to the margin; therefore, the underlying merchandise margin declined 330 basis points due to markdowns at American Eagle. Operating income was $211 million, including an approximately $161 million nonrecurring net benefit from tariff refunds.
On a trailing 12-month basis ending within fiscal 2026, the company recorded revenue of $5.7 billion, gross profit of $2.3 billion, net income of $336.9 million, and earnings per share of approximately $1.98. Q2 fiscal 2026 results show that growth at Aerie and OFFLINE has become the portfolio's primary driver, while fixing American Eagle's assortment and managing its inventory and margins remain necessary to convert group growth into recurring operating improvement that does not depend on tariff refunds.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $19.67, within a wide range of $15 to $27, with a "Neutral" consensus; the average is approximately 31% below the 52-week range high of $28.46, while the highest target is close to that high and the lowest target is close to the range low of $14.06. An analysis published on September 10, 2026, cited a price-to-earnings ratio of approximately 9 times and a price-to-sales ratio of 0.42, but this valuation discount is associated with weakness at American Eagle, pressure on merchandise margins, and the dependence of Q2 fiscal 2026 earnings on nonrecurring tariff refunds. The wide target range and Neutral consensus reflect a divide between the value of Aerie's growth and the risks related to inventory, margins, and earnings quality.
Figures in the text are as of 2026-09-11; the live price is shown at the top of the page.
Revenue exceeded estimates and reached $1.4 billion, but total comparable sales grew 6% versus an expectation of 6.7%. Investors also focused on the 330-basis-point decline in merchandise margin, the 14% increase in inventory cost, and the expectation for gross margin to be flat in Q3 fiscal 2026. The results also revealed a divergence between Aerie's 19% comparable sales growth and American Eagle's 1% comparable sales decline.
Aerie and OFFLINE generated revenue of $536 million in Q2 fiscal 2026, up 25%, and their comparable sales grew 19%. Growth included apparel, intimates, and activewear, with products such as Cloud Fleece and the Float collection launched in July 2026 standing out. Because consumer awareness of the Aerie brand was 59% versus approximately 76% for American Eagle, management sees additional room to expand the customer base.
Net income was $134.1 million and earnings per share were $0.79 in Q2 fiscal 2026. However, operating income of $211 million included a net benefit of approximately $161 million from tariff refunds, while gross profit included a benefit of $179 million. These refunds should therefore be separated from underlying performance, particularly because merchandise margin declined 330 basis points.
For Q3 fiscal 2026, the company expects comparable sales growth in the mid-to-high single-digit range and operating income between $110 million and $115 million. It expects Aerie and OFFLINE growth from the high teens to approximately 20%, versus roughly flat performance for American Eagle, with gross margin comparable to the prior year. For fiscal 2026, it is targeting operating income between $540 million and $550 million based on comparable sales growth in the mid-single digits.
Consolidated inventory cost increased 14% and units rose 9% in Q2 fiscal 2026, with the cost including the impact of additional tariffs. Management said the need for clearance was concentrated primarily in shorts and certain seasonal and fashion products at American Eagle, in addition to rebalancing older denim fits. The company included potential markdowns in its Q3 fiscal 2026 margin outlook, while Aerie continued to deliver better merchandise margin performance.
The company ended Q2 fiscal 2026 with approximately $148 million in cash and investments and total liquidity of $783 million, including the credit facility. Capital expenditures were $66 million during the quarter. It also returned $21 million to shareholders through quarterly dividends, balancing investment in the business with cash returns, but this does not eliminate inventory and margin risks.
