Why American Eagle Outfitters Shares Are Rising Today

American Eagle Outfitters Inc AEO shares are trading higher after the company raised Q4 guidance.

The company disclosed that Q4 quarter-to-date revenue, through Saturday, December 30, 2023, is up around 8%, with American Eagle rising in the high single digits and Aerie up in the low teens.

Consequently, the company now expects its Q4 revenue to be up in the low double digits (prior view up high-single digits), including a four-point positive contribution from the 53rd week, as previously discussed.

Also, the company expects operating profit to be around $130 million, vs. the previous guidance of $105 million-$115 million.

The guidance excludes and reflects benefits from record holiday sales and strong merchandise margins.

Jay Schottenstein, AEO's Executive Chairman of the Board and Chief Executive Officer, said, "This holiday season we executed with confidence and precision, delivering winning product assortments and an exciting customer experience which showcased the strength of our brands and operations." 

"Looking ahead to 2024, we remain confident in our ability to deliver healthy earnings growth and operating rate improvement as we maintain inventory and promotional discipline, prioritize expense control and benefit from ongoing work on our profit improvement initiative."

Last month, AEO raised its quarterly dividend by 25% to $0.125, reflecting improved fundamentals and free cash flow in 2023.

Price Action: AEO shares are up 8.27% at $21.48 on the last check Monday.

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