Operating profit is now expected to reach $130m, a substantial increase from the earlier guidance range of $105 to $115m. Credit: Shutterstock.

American Eagle Outfitters (AEO) reported an 8% revenue increase in its Q4 results through to 30 December 2023.

The improved outlook is credited to the performance of holiday sales and strong merchandise margins.

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AEO CEO and executive chairman of the board Jay Schottenstein 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.

Schottenstein expressed his satisfaction with the ongoing momentum that the company is experiencing across its brands. AEO’s core brand, American Eagle, tracked up in the high single digits, while Aerie experienced an upswing in the low teens.

Building on this positive momentum, the company has revised its fourth-quarter revenue outlook, anticipating a low double-digit increase.

Operating profit is now expected to reach $130m, a substantial increase from the earlier guidance range of $105m to $115m.

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This upward adjustment includes a four-point positive contribution from the 53rd week.

This announcement follows the company’s strong Q3 revenue which increased 5% to $1.3bn in the quarter that ended 28 October and resulted in a raised revenue forecast due to steady demand for apparel and accessories ahead of the holiday season.

Schottenstein continued: “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, prioritise expense control and benefit from ongoing work on our profit improvement initiative.”

In April 2023, American Eagle Outfitters (AEO) and thredUP announced the launch of RE/AE, a digital resale shop of secondhand and exclusive vintage American Eagle clothing. Powered by Thredup’s Resale-as-a-Service (RaaS), RE/AE aimed to deliver a customisable and scalable resale experience to AE’s customers.