American Eagle Outfitters (AEO) Q1 FY27 earnings call: guidance and Q&A

Asked for color on which women's-bottoms styles need leaning into and whether the comp trend can inflect positive by back-to-school, as it did after last year's first-half issues.

Foyle said tops/tees run rates are exceptional but not enough to offset a concentrated bottoms miss; the team has already pivoted, is seeing more positive recent denim results, has completed back-to-school testing on rises and fits, and views Q3 denim as its 'Super Bowl.'

“We know where the problem is. We are going to pivot, and we've already done testing for back-to-school. We know what rises are working. We know what fits are working.”

asked by Jay Sole · answered by Jennifer Foyle

Asked whether Aerie's store growth is driven by more shoppers, new shoppers, or higher spend per visit.

Foyle said 'all of the above' — brand awareness up double digits, all categories working, head-to-toe outfitting engaging customers. Mathias added that traffic, conversion, AUR, AOV, existing and new customers are all 'green across the board.'

“it's traffic, it's conversion, it's AUR, it's AOV. It's existing customers, it's new customers. So all the above comments is -- all the metrics are green across the board on that front.”

asked by Marni Shapiro · answered by Mike Mathias

Asked about Aerie new-customer acquisition and market-share opportunity, and the drivers of Q2 gross-margin contraction (markdowns, freight, tariffs) plus back-half puts and takes.

Mathias flagged 150-200 bps of Q2 tariff impact vs none last year, some AE markdown pressure to get clean for back-to-school, and BOW/expense leverage as an offset; back-half expects total gross-margin expansion. Foyle said Aerie new-customer acquisition is up roughly 1 million with retained customers also up.

“our new customer acquisition is up roughly $1 million, which is incredible... not only is our new customer acquisitions up, our retained customers are up.”

asked by Matthew Boss · answered by Jennifer Foyle

Asked whether the Q2 brand split mirrors Q1, and about AE store closures and remodel performance.

Mathias guided ~25 net AE closures, ~40 Aerie/OFFLINE openings, and 80+ AE remodels for the year (roughly one more year of the program); Q2 mix is flat-to-slightly-down AE and high-teens-to-20% Aerie. Foyle added that recent women's trends have turned and other bottoms categories beyond denim will be penetrated higher for back-to-school.

“we're still expecting a net 20 to 25 -- around 25 closures in the AE brand for the year. On the opening side, about 40 Aerie and OFFLINE openings.”

asked by Dana Telsey · answered by Mike Mathias

Asked where the AE conversion gap is biggest (stores vs digital) and how much of the inventory dollar increase is mix versus tariffs.

Foyle located the conversion opportunity primarily in stores, with digital recently accelerating, and described store-grade testing of price/value/quality. Mathias said tariffs are the biggest driver of the 27% cost increase vs 5% units; normalizing for tariffs and the prior-year write-down, cost dollars would be up high-single-digit, and inventory is well-positioned.

“normalizing for those 2 things, our cost dollars would be up more in the high single-digit range. So a couple of reconciling items, take your 27 to -- up high single with units up 5%.”

asked by Angus Kelleher-Ferguson (for Adrienne Yih) · answered by Mike Mathias

Asked how marketing spend is allocated across AE and Aerie, and the strategy for comping Aerie's strong results in H2.

Mathias said spend is up across both brands, Aerie commensurate with its ~30% sales growth, with Q2 the last quarter of AE incremental spend before total H2 spend goes flat and rebalances toward digital/performance/influencer media to drive conversion. Foyle emphasized Aerie's track record of comping the comp through better product, marketing and quality.

“the back half spend is more weighted toward digital media, performance marketing, influencer spend, more day-to-day traffic driving elements. So I think that's where the conversion will play in, too.”

asked by Jungwon (Jonna) Kim · answered by Mike Mathias

Asked whether the bottoms issue is now needing to go deeper into consensus key silhouettes, and for the size of the tariff claim sold and what remains.

Foyle confirmed the issue was insufficient distortion into newer silhouettes being tested, now being rightsized for back-to-school. Mathias detailed $190M in claims filed, over $100M received, ~$70M of claims sold for ~$20M at year-start, ~$75M net received to date, and a ~$140M net cash figure if fully refunded — none recognized or in guidance.

“we filed $190 million worth of claims. We've gotten over $100 million back at the moment. We did... at the beginning of the year, we sold about $70 million worth of claims for roughly $20 million.”

asked by Janine Hoffman Stichter · answered by Mike Mathias

Asked whether guidance embeds AE returning to positive comp in H2 while Aerie slows against tougher compares.

Schottenstein said he expects positive comp growth and that Q3/Q4 is where the team shines. Mathias specified H2 assumptions of AE in the low-single-digit range and Aerie moderating to high-single/low-double digit, reiterating the weakness is very isolated to women's bottoms while men's bottoms were positive.

“It's very isolated to bottoms and women's bottoms. Men's bottoms was actually positive, jeans and men's was positive. So it's a very targeted area of opportunity.”

asked by Tom Nikic · answered by Mike Mathias