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.

Here are some insights regarding one-day (1D) post-earnings returns:

Additional data for recorded 5-Day (5D) and 21-Day (21D) returns post earnings is summarized along with the statistics in the table below.

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.

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