What happened Shares of American Eagle Outfitters (NYSE: AEO) rose as much as 5% in the first hour of trading on Thursday. The news driving the gain was the company's after-market earnings pre-announcement on Wednesday. It was pretty good reading. So what The big story is that American Eagle Outfitters is seeing strength in both its core brand and its Aerie division. CEO Jay Schottenstein noted that he was "amazed" by the results at Aerie, which is the retailer's core growth platform at the moment. That said, he also stated that "stronger merchandise, marketing and inventory management" has led to solid results in the much larger American Eagle division. All in, the company expects to exceed its first-quarter projections when it reports earnings on May 26. Image source: Getty Images. There are no firm numbers yet, since the fiscal first quarter doesn't technically end until May 1. But the expectation is that revenue will exceed $1 billion and operating income will come in around $120 million. The top-line number represents 19% growth over pre-coronavirus sales levels, which is impressive given the broad impact of the ongoing pandemic. Meanwhile, operating income is expected to benefit from both high customer demand and improved margins. Overall, this is a pretty good update. Now what Given the strength of the company's performance, long-term investors might be wondering why the stock only gained 5% on the news. The answer is likely that the shares have advanced around 130% since the start of 2020, before the pandemic was a major issue. Yes, it looks like American Eagle Outfitters is executing well. But it also seems like investors have figured this out already. 10 stocks we like better than American Eagle OutfittersWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and American Eagle Outfitters wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source