American Eagle Outfitters (AEO)
The stock dropped about 15% after mixed earnings, sales, and comparable-store (comp) numbers. Top-line sales came in slightly above estimates at $1.38 billion versus $1.37 billion, up about 8% year over year. Adjusted earnings per share (EPS) beat by a wide margin at 79 cents versus a 21-cent estimate, up about 76% from 45 cents last year.
Total comps rose 6%, but the split matters. The core American Eagle brand comps fell about 1%. The bright spot was the Aerie brand, with offline comps up 19% and brand sales up 25%. Investors were not receptive to the strong Aerie numbers.
The company received about $196 million in tariff refunds. At the same time, merchandising margins fell about 330 basis points, which points to inventory hang-ups. Guidance came in at mid-single-digit positive for operating income, estimated near $550 million on the high end.
Aerie has been the steady bright spot for AEO. The open question is whether shoppers are putting gasoline and groceries ahead of buying apparel.
Macy's (M)
The stock traded down about 5% despite a strong EPS beat. Sales were $4.87 billion versus $4.81 billion expected. EPS was 63 cents versus 35 cents last year and a 37-cent estimate. Systemwide comp sales consensus was 1%; the total business posted 2.7%.
Macy's own comps beat consensus at 1.1%. Bloomingdale's comps rose 11.3%, the strongest spot and its highest Q2 sales ever, and that chain serves a more affluent, higher-end shopper. Blue Mercury, also a high-end store, rose 6.2%.
Macy's raised guidance. Old fiscal year 2026 sales guidance on the high end was $21.75 billion; new is $21.83 billion. Old EPS guidance on the high end was $2.20; new is $2.35. Comp sales guidance rose to about 1% to 1.5%, possibly less than some had hoped. Gross margins looked slightly down, the same pattern as AEO, and that margin compression is a reason for the downside move.
The results show a split spending pattern, sometimes called V-shaped or K-shaped: higher-end shoppers keep spending at Bloomingdale's and Blue Mercury, while lower-end shoppers pull back.
Cooper Companies (COO)
The stock fell about 17.5%, or $11. Cooper is a medical device company with surgical systems and a vision business. A spin-off that was expected did not happen, which is part of the problem.
Combined top-line sales for both divisions were about $1.06 billion versus $1.10 billion estimated, a miss and a decline. Adjusted EPS beat at $1.15 versus $1.12, up 4%. The vision business posted $717 million in revenue, basically flat. Margin guidance is expected to be weaker. Surgical organic growth was 4% to 6%; the surgical division grew while vision fell.
The bigger shock was that the surgical division is not being sold, which had been anticipated, creating issues with investors. The company started a buyback of $2 billion to $3 billion, but investors were not receptive.
Market backdrop
Winners were hard to find. On the S&P 500, only a handful were up: Apple (AAPL), Coca-Cola (KO), Walmart (WMT), Johnson & Johnson (JNJ), UnitedHealth (UNH), Travelers (TRV), and Chevron (CVX). Cooper was the biggest laggard.
