Young adult apparel retailer American Eagle Outfitters (NYSE:AEO) beat Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $1.28 billion. Its GAAP profit of $0.45 per share was significantly above analysts’ consensus estimates.
American Eagle Outfitters announces better-than-expected results for the second quarter Wednesday after the close, and shares are soaring. Here's a rundown of the retailer's report.
As the regular session of the US market on Wednesday comes to an end, let's delve into the after-hours session and discover the top gainers and losers shaping the post-market sentiment.
Shares of young adult apparel retailer American Eagle Outfitters (NYSE:AEO) jumped 5.1% in the morning session after the company announced a collaboration with NFL star tight end Travis Kelce.
American Eagle Outfitters Inc (NYSE:AEO) shares are trading higher Wednesday after the company announced a collaboration with NFL star tight end Travis Kelce.
Shares of young adult apparel retailer American Eagle Outfitters (NYSE:AEO) fell 3.5% in the morning session after Bank of America downgraded the apparel maker to 'Underperform' from 'Neutral'. The downgrade came from Bank of America analyst Christopher Nardone, who also trimmed the firm's price target on the stock to $10 from $11. The bank cited concerns over the impact of higher tariffs and slowing sales at the company's activewear brand, Aerie. In line with this outlook, Bank of America reduced its earnings per share (EPS) estimates for American Eagle for fiscal years 2025 and 2026 by 8% and 30%, respectively. The firm noted that it foresees a "longer path to more normalized earnings in the current environment" for the apparel maker.
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A number of stocks fell in the afternoon session after a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands.
A number of stocks jumped in the afternoon session after markets continued to rally amid growing investor optimism for a Federal Reserve interest rate cut in September. This optimism was spurred by a recent Consumer Price Index (CPI) report that did not show runaway inflation, increasing the perceived probability of a rate cut to over 90%. Lower interest rates are generally seen as a positive for the economy as they reduce borrowing costs for consumers, which can stimulate spending on non-essential goods. Consequently, investors bid up shares in the apparel, home furnishings, and automotive retail industries in anticipation of stronger consumer demand.
The financial markets are currently riding a wave of optimism, largely fueled by the anticipation of an interest rate cut by the Federal Reserve. This bullish sentiment, which has seen major stock indexes like the S&P 500 (SPX), Nasdaq (IXIC), and Dow Jones Industrial Average (DJIA) reach new record
