American Eagle Outfitters Profit Up
American Eagle Outfitters (NYSE:AEO) reported its Q2 2025 results on July 1, 2025, delivering revenue of $1.28 billion (down 1% YoY) (GAAP), operating income up 2% YoY to $103 million, and diluted EPS up 15% YoY. Management highlighted significant customer acquisition driven by high-profile marketing campaigns, robust turnaround in Aerie brand comps (+3% YoY), and outlined explicit strategies for tariff mitigation, SG discipline, and ongoing store optimization. Below are three actionable, insight-driven themes with direct investment impact.
American Eagle's Sydney Sweeney and Travis Kelce campaigns generated over 700,000 net new customers since launch, fueling strong positive traffic and denim sellouts. But the combined cross-gender reach and omnichannel impact of these campaigns drove unprecedented new customer acquisition.
Incremental tariff costs are estimated at approximately $20 million in Q3 2025 and $40 million to $50 million in Q4 2025, the sourcing team reduced unmitigated tariff exposure from $180 million to $70 million for the back half of FY2025 through country-of-origin rebalancing and vendor negotiations. China sourcing will drop to low single-digit penetration in the back half of the year, compared to mid-single digits year-to-date, according to management on the Q2 2025 earnings call.
Source Fool.com
