American Eagle Outfitters, Inc. (NYSE: AEO) reported its fourth-quarter financial results for Fiscal Year 2024, revealing a decline in revenue yet showcasing certain strengths within its segments. The retailer, which specializes in casual apparel and operates brands including American Eagle and Aerie, showed a stable overall condition but faced some pressure in the current consumer environment.

For the fourth quarter ending February 1, 2025, American Eagle’s total net revenue was $1.6 billion, reflecting a decrease of 4% compared to the previous year. This decline included an estimated impact of $85 million due to one less selling week, which affected year-over-year comparisons. Comparable sales increased by 3%, following an 8% rise in the same period last year.

Operating income for the fourth quarter was $142 million, an increase from the previous year, with an operating margin of 8.9%. This result included an adverse impact of approximately $20 million from the retail calendar shift. The gross profit was reported at $599 million, yielding a gross margin of 37.3%, which was influenced by higher freight and product costs but offset by lower markdowns.

For the full fiscal year, American Eagle reported total net revenue of $5.3 billion, showing a modest increase of 1% compared to the previous fiscal year. The company highlighted a full year adjusted operating income of $445 million, which represented a 19% increase year-over-year. The adjusted operating margin expanded by 120 basis points to 8.3%.

Sales growth was primarily driven by the Aerie brand, which achieved a comparable sales increase of 6% for the quarter and 5% for the year. American Eagle’s comparable sales rose by 1% in the fourth quarter and by 3% for the full year. The company reported a total gross profit of $2.1 billion for the fiscal year, and the gross margin was 39.2%, reflecting improvements driven by lower operating costs.

The company remained disciplined in its expense management strategies, as evidenced by a 6% year-over-year reduction in selling, general and administrative expenses in the fourth quarter, resulting in a leverage of 40 basis points. Additionally, American Eagle returned approximately $280 million to shareholders during the year through share repurchase and dividends.

Looking ahead, the company provided guidance for the first quarter of 2025, anticipating a revenue decline in the mid-single digits and operating income in the range of $20 million to $25 million, factoring in an approximately $10 million negative impact from the strengthening U.S. dollar. For the fiscal year, the outlook included expectations for a low single-digit decline in revenue and operating income projected at $360 million to $375 million.

American Eagle’s capital expenditures for the fiscal year totaled $223 million and are expected to increase to approximately $300 million for Fiscal Year 2025, which includes significant investments in digital infrastructure and store remodels.