American Eagle Outfitters Stock Hits 52-Week Low After Tariff Refund Masks Weak Core Brand Results

American Eagle Outfitters shares fell as much as 16% to a 52-week low on Thursday after investors looked past a headline earnings beat and focused on weakness at its namesake brand and a cautious outlook. The company reported second-quarter earnings of 79 cents per share, far above Wall Street's estimate of roughly 22 cents, but that result was heavily inflated by a $161 million net Section 301 tariff refund. Revenue rose 8% to $1.38 billion, narrowly beating the $1.37 billion consensus, and consolidated comparable sales climbed 6%.

The Aerie brand was a clear standout, posting comparable sales growth of roughly 19% to 25% depending on the source, but persistent softness at the core American Eagle label dragged on the overall picture. Comparable sales at the namesake brand came in short of estimates, which proved the more influential signal for investors already skeptical of the earnings quality given the tariff-related windfall.

Looking ahead, management kept its full-year same-store sales forecast unchanged and projected flat gross margins for the third quarter, a combination that amplified selling pressure. Telsey Advisory Group reiterated its Market Perform rating and cut its price target to $18 from $20. UBS also trimmed its price target, citing costs, though it said the company's long-term thesis remained intact. Unusual put option volume in AEO was reported rising into the close.