American Eagle Outfitters (AEO) has reported strong holiday demand, led by its Aerie brand, which has pushed the company to raise its fourth-quarter operating income forecast.

The retailer now expects fourth-quarter operating income to reach $167 million to $170 million, up from its prior guidance of $155 million to $160 million. The revised outlook reflects robust margin performance and an expected comparable sales growth of 8 per cent to 9 per cent, the company said.

The updated guidance includes roughly $50 million in tariff-related pressure, in line with prior disclosures.

According to the retailer, fourth quarter-to-date comparable sales are up in the high single digits. Sales trends are positive across brands and channels, with American Eagle comp growth in the low single digits and Aerie comps in the low twenties.

“Momentum continued in the fourth quarter with record December sales fueled by the power of our brands, with particularly strong growth at Aerie and Offline and sequential growth at American Eagle,” said Jay Schottenstein, executive chairman of the board and CEO of AEO. 

“Our customers embraced new product collections and responded to our latest marketing initiatives, with strength continuing in the post-holiday period. We look forward to building on this positive trajectory with new customer-inspired collections, as we remain focused on creating value for our shareholders.” 

American Eagle Outfitters operates a portfolio of brands, including American Eagle, Aerie, Offline by Aerie, Todd Snyder, and Unsubscribed. 

The company runs stores in the US, Canada, and Mexico, while also selling products in more than 30 countries through global license partners and a growing e-commerce platform.