Softening consumer demand led to American Eagle Outfitters (AEO) signaling a cautious outlook for the new fiscal year despite the company reporting a significant rise in profits during Q4, FY25.

In Q4, FY25, AEO’s net income increased to $104.3 million from $6.3 million in the same period last year. The previous year's results were significantly impacted by $131 million in impairment and restructuring charges.

However, AEO’s revenue for the quarter ending February 1, 2025 decreased by 4.4 per cent Y-o-Y to $1.6 billion from $1.7 billion last year. This discrepancy was attributed to an extra week in the prior year's reporting period. When adjusted for this extra week, comparable sales actually rose by 3 per cent, building on an 8 per cent increase from the previous year. This growth was driven by a 6 per cent increase in comparable sales at the Aerie division and a 1 percent increase at the American Eagle business.

Highlighted the progress made on the company's ‘Powering Profitable Growth’ strategic plan, Jay Schottenstein, Executive Chairman and CEO, AEO emphasized on the team's strong operating profit growth, positive momentum across brands and channels, and disciplined expense management.

For the full fiscal year, AEO's revenue increased by 1.3 per cent to $5.33 billion from $5.26 billion. Looking ahead, the company anticipates a low single-digit decline in revenue this fiscal year.

Schottenstein acknowledged a slower-than-expected start to the first quarter, citing weaker demand and colder weather. While expecting improvement as the spring season progresses, AEO is taking proactive measures to boost revenue, manage inventory, and reduce expenses.