PITTSBURGH, September 10 — American Eagle Outfitters reported fiscal second-quarter 2027 results on September 9, disclosing a sharp profit increase driven largely by tariff refunds while same-store sales at its flagship American Eagle brand fell below prior-year levels. Revenue rose 8% year over year to $1.38 billion (approximately ¥210 billion), slightly exceeding the $1.37 billion consensus estimate compiled by LSEG. Adjusted earnings per share came in at $0.79, up sharply from $0.45 in the year-ago period.
Net income climbed 72.7% to $134 million (approximately ¥21 billion). The bottom line, however, comes with an asterisk.
The substantial profit expansion was largely attributable to a $161 million (approximately ¥25 billion) tariff refund recognized under the International Emergency Economic Powers Act. Excluding this one-time refund benefit, the company’s underlying earnings power was actually weaker. Gross margin expanded 9.8 percentage points year over year to 48.7%, but 13 percentage points of that expansion came from the tariff refund, meaning the underlying merchandise margin declined by 3.3 percentage points.
The divergence between brands was stark. Aerie, the company’s lingerie and activewear brand, along with its activewear line OFFLINE, posted a 19% increase in same-store sales, with revenue surging 25% to $536 million (approximately ¥82 billion).
In contrast, the flagship American Eagle brand saw same-store sales fall 1% year over year. Jay Schottenstein, Executive Chairman and CEO, said in a statement: “Our second quarter results were driven by broad-based momentum at Aerie and OFFLINE, along with positive progress at American Eagle.” He indicated that for the second half, the company aims to further accelerate Aerie’s momentum while speeding up improvements at American Eagle to enhance overall business stability and profitability.
The company raised its full-year operating income guidance to $540–550 million (approximately ¥83–84 billion), a significant upward revision from the $390–410 million (approximately ¥60–63 billion) projected in May. However, the difference is almost entirely attributable to the tariff refund. Excluding the refund, the underlying second-half outlook was actually revised downward — from low-single-digit revenue growth expected in May to roughly flat at present.
For the third quarter (August–October 2026), the company expects same-store sales to increase 5–9% year over year, with Aerie projected to grow in the high-teens to 20% range while American Eagle is expected to be roughly flat. Third-quarter operating income is forecast at $110–115 million (approximately ¥17–18 billion).
Since nearly all of the tariff refund was recognized in the second quarter, it will have no impact on results from Q3 onward. Quarter-end inventory swelled 14% year over year to $818 million (approximately ¥130 billion), with ongoing markdowns of prior-season merchandise contributing to the decline in merchandise margin. The market reacted negatively to the one-time profit boost and the delayed recovery in the core business, sending shares down nearly 12% at one point in after-hours trading following the earnings release, bringing the year-to-date decline to 36%.
Other named figures associated with the story include Jen Foyle and Patrick Ricchiardi, along with the research firm Third Bridge. Investors will note that the third quarter will be the first clean read on the company’s underlying trajectory without the tariff refund distortion.
The figure that matters then will be whether American Eagle’s same-store sales can move off flat and whether Aerie’s momentum holds.
