Executive Summary

• American Eagle Outfitters reported 2Q 2016 EPS of $0.23 and exceeded expectations of $0.21, driven by improved margins.
• Sales at Aerie saw strong momentum and reported the fifth consecutive quarter of comps above 20%. The brand plans to launch a new sports and yoga line this fall.
• Management guided 3Q 2016 comps will be up low single-digit versus the expected 2.8% and EPS of $0.40–$0.41, in line with the $0.41 consensus.