American Eagle Outfitters (AEO) has reported sales growth for the third quarter, reversing the declines recorded during the first half.

The company’s net revenue for the quarter ended November 1 rose 6 per cent year-on-year to $1.36 billion, compared to the 1 per cent drop in the second quarter and 5 per cent decrease in the first quarter.

Comparable sales also grew 4 per cent following declines in the first two quarters, mainly driven by an 11 per cent uplift at Aerie. The American Eagle saw comparable sales increase by a modest 1 per cent.

Gross profit rose 5 per cent to $552 million, but gross margin declined 40 basis points to 40.5 per cent, mainly due to tariffs. Positive sales and lower costs largely offset higher markdowns.

Operating profit increased from $106 million a year earlier to $113 million. Net income grew 14 per cent to $91 million.

Jay Schottenstein, executive chairman and CEO, said the results exceeded expectations.

“I’m extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations – all having a positive impact,” Schottenstein said.

“Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season,” he added. “We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and offline.”

AEO expects comparable sales to increase 8-9 per cent in the fourth quarter and by low single digits for the full year.