American Eagle Outfitters Inc (AEO) reported increased profits for Q4, FY25 but acknowledged a cautious outlook for the new fiscal year due to slower consumer demand.

The company's net income for the quarter rose significantly to $104.3 million, compared to $6.3 million in the previous year, which was impacted by substantial impairment and restructuring charges. The earnings per share exceeded analysts' expectations by 3 cents.

However, revenue for the quarter decreased by 4.4 per cent to $1.6 billion from $1.7 billion in the previous year, primarily due to an extra week in the prior year's reporting period. When adjusted for this extra week, comparable sales actually increased by 3 per cent, following an 8 per cent increase the year before. This included a 6 per cent comparable sales increase in the Aerie division and a 1 per cent increase in the American Eagle business.

For full FY25, AEO's revenue increased by 1.3 per cent to $5.33 billion.

Highlighting the progress made on their “Powering Profitable Growth” strategic plan, Jay Schottenstein, Executive Chairman and CEO, emphasizes on the team's strong operating profit growth, positive momentum across brands and channels, disciplined expense management, and operational efficiencies.

Looking ahead to 2025, the company anticipates a low-single digit decline in revenue. A week demand and colder weather could lead to a slower-than-expected start to the first quarter, notes Schottenstein, While expecting improvement as the spring season progresses, AEO is also taking proactive measures to strengthen revenue, manage inventory, and reduce expenses. The company remains focused on its long-term strategic priorities while navigating an uncertain consumer and operating environment.