American Eagle Outfitters (NYSE: AEO) is set to announce its fiscal first-quarter earnings on Thursday, May 29, 2025, with analysts forecasting an earnings loss of 22 cents per share along with $1.09 billion in revenue. This is compared to last year’s figures of 34 cents per share and $1.14 billion in revenue. Historically, AEO stock has dropped 60% of the time after earnings announcements, with a median one-day decline of 5.4% and a maximum decline recorded at 14%.
For the entire year, AEO anticipates a slight decline in sales, expected to fall by low single digits. The company currently has a market capitalization of $2.0 billion. Revenue for the past twelve months was $5.3 billion, and it was operationally profitable, achieving $445 million in operating profits and a net income of $329 million. Also see Buy or Sell American Eagle Outfitters’ Stock?
For traders driven by events, historical trends may provide an advantage, whether by positioning before earnings or reacting to movements after the release. That said, if you’re looking for potential gains with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 with returns exceeding 91% since its inception. See earnings reaction history of all stocks.
American Eagle’s Historical Chances of Positive Post-Earnings Returns
Here are some insights regarding one-day (1D) post-earnings returns:
- There are 20 earnings data points collected over the past five years, with 8 positive and 12 negative one-day (1D) returns recorded. In summary, positive 1D returns were observed roughly 40% of the time.
- However, this percentage drops to 36% if we look at data from the last 3 years instead of 5.
- The median of the 8 positive returns is 2.4%, and the median of the 12 negative returns is -5.4%
Additional data for recorded 5-Day (5D) and 21-Day (21D) returns post earnings is summarized along with the statistics in the table below.
Relationship Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though not beneficial if the correlation is weak) is to analyze the correlation between short-term and medium-term returns following earnings, identify the pair with the highest correlation, and execute the relevant trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data derived from 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the following 5D returns.
Discover more about Trefis RV strategy, which has outperformed its all-cap stocks benchmark (a combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), providing strong returns for investors.