Why American Eagle Outfitters (AEO) Stock Is Down 13% This Week

American Eagle Outfitters Inc AEO shares are trading lower by 13% to $10.90 since Monday’s open. The company reported fourth-quarter financial results and received a number of analyst rating updates.

What To Know: American Eagle Outfitters reported fourth-quarter earnings of 54 cents per share, aligning with analyst expectations, while revenue reached $1.6 billion.

Comparable sales grew 3%, with Aerie up 6% and American Eagle rising 1%. Gross margin held at 37.3%, reflecting higher freight and product costs offset by lower markdowns. Inventory decreased 1% to $637 million, potentially positioning the company well for spring.

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CEO Jay Schottenstein highlighted the success of AEO's Powering Profitable Growth strategy, citing strong operating profit and disciplined expense management. However, the company forecasted a mid-single-digit revenue decline for the first quarter and a low-single-digit drop for fiscal 2025, with gross margin expected to fall.

What Else: Telsey Advisory Group's Dana Telsey reiterated a Market Perform rating while cutting AEO's price target from $18 to $12. The analyst noted a weaker-than-expected FY25 outlook due to soft consumer demand and cold weather.

While AEO's peak-season performance was strong, macroeconomic uncertainty and sluggish first-quarter sales remain concerns. Operating income guidance of $360–$375 million falls short of the $454 million consensus.

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How To Buy AEO Stock

By now you're likely curious about how to participate in the market for American Eagle Outfitters – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of American Eagle Outfitters, which is trading at $11.01 as of publishing time, $100 would buy you 9.08 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, AEO has a 52-week high of $26.25 and a 52-week low of $10.92.