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Can Better Store Traffic Support American Eagle's Sales Recovery?
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Key Takeaways
AEO's revenue rose 1%, while comparable sales declined 1%, improving from the first quarter.
AEO's men's business posted its fourth straight quarter of positive comparable sales.
AEO is shifting marketing to conversion as it rebalances inventory and refines product strategies.
American Eagle Outfitters, Inc. (AEO - Free Report) showed signs of improvement in the second quarter of fiscal 2026, although its namesake brand still had work to do. American Eagle’s total revenues increased 1% year over year, while comparable sales declined 1%, an improvement from the fiscal first quarter. Management highlighted that men’s business delivered its fourth consecutive quarter of positive comparable sales, while women’s bottoms improved and newer denim fits gained strong customer acceptance.
Store traffic is emerging as an important metric in the brand’s recovery. Management said American Eagle’s stores remained on the lower side of performance, while digital was stronger. However, store trends improved in the fiscal third quarter. Management also noted that American Eagle tends to be a destination at the mall in the back-to-school and holiday periods, with stores typically performing better in these peak periods.
The company is also shifting marketing spending toward conversion-focused tactics after spending the previous four quarters building brand awareness. Management specifically identified store traffic and conversion against that traffic as definite focuses for American Eagle going forward. Digital marketing and performance marketing are being emphasized to encourage purchase behavior, with management noting some traction alongside the sequential improvement seen quarter-to-date.
Product strategy also remains a key part of American Eagle’s improvement efforts. The company is working through older seasonal inventory, including shorts and certain fashion products, while continuing to rebalance inventory. Management also highlighted sequential improvement in denim following a pivot toward low-rise and other fits that were gaining traction.
Overall, American Eagle identified product strategies, store traffic and conversion against that traffic as key focuses for improving the brand’s performance.
The Zacks Rundown for AEO
AEO’s shares have gained 8% in the past six three months against the industry’s decline of 10.6%. The company currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
From a valuation standpoint, AEO trades at a forward price-to-earnings ratio of 8.85X, lower than the industry’s average 12.24X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AEO’s current fiscal year earnings implies a year-over-year growth of 49.3%, and the same for next fiscal year earnings implies a year-over-year decline of 15.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
The Zacks Consensus Estimate for FIGS’ current fiscal-year sales and earnings implies growth of 19.7% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.
Fossil Group, Inc. (FOSL - Free Report) designs, develops, markets and distributes consumer fashion accessories in the United States, Europe, Asia and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the consensus mark for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
Boot Barn, Holdings Inc. (BOOT - Free Report) operates specialty retail stores in the United States and internationally. Boot Barn currently carries a Zacks Rank of 2.
The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.8% and 23.5%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.
View the Zacks #1 Rank List
Image: Bigstock
Can Better Store Traffic Support American Eagle's Sales Recovery?
Key Takeaways
American Eagle Outfitters, Inc. (AEO - Free Report) showed signs of improvement in the second quarter of fiscal 2026, although its namesake brand still had work to do. American Eagle’s total revenues increased 1% year over year, while comparable sales declined 1%, an improvement from the fiscal first quarter. Management highlighted that men’s business delivered its fourth consecutive quarter of positive comparable sales, while women’s bottoms improved and newer denim fits gained strong customer acceptance.
Store traffic is emerging as an important metric in the brand’s recovery. Management said American Eagle’s stores remained on the lower side of performance, while digital was stronger. However, store trends improved in the fiscal third quarter. Management also noted that American Eagle tends to be a destination at the mall in the back-to-school and holiday periods, with stores typically performing better in these peak periods.
The company is also shifting marketing spending toward conversion-focused tactics after spending the previous four quarters building brand awareness. Management specifically identified store traffic and conversion against that traffic as definite focuses for American Eagle going forward. Digital marketing and performance marketing are being emphasized to encourage purchase behavior, with management noting some traction alongside the sequential improvement seen quarter-to-date.
Product strategy also remains a key part of American Eagle’s improvement efforts. The company is working through older seasonal inventory, including shorts and certain fashion products, while continuing to rebalance inventory. Management also highlighted sequential improvement in denim following a pivot toward low-rise and other fits that were gaining traction.
Overall, American Eagle identified product strategies, store traffic and conversion against that traffic as key focuses for improving the brand’s performance.
The Zacks Rundown for AEO
AEO’s shares have gained 8% in the past six three months against the industry’s decline of 10.6%. The company currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
From a valuation standpoint, AEO trades at a forward price-to-earnings ratio of 8.85X, lower than the industry’s average 12.24X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AEO’s current fiscal year earnings implies a year-over-year growth of 49.3%, and the same for next fiscal year earnings implies a year-over-year decline of 15.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
FIGS, Inc. (FIGS - Free Report) operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’ current fiscal-year sales and earnings implies growth of 19.7% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.
Fossil Group, Inc. (FOSL - Free Report) designs, develops, markets and distributes consumer fashion accessories in the United States, Europe, Asia and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the consensus mark for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
Boot Barn, Holdings Inc. (BOOT - Free Report) operates specialty retail stores in the United States and internationally. Boot Barn currently carries a Zacks Rank of 2.
The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.8% and 23.5%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.