Shares were slipping 36 cents, or 1.6%, to $22.65 in recent trading.

For the quarter ended Aug. 4, American Eagle earned $81.3 million, or 37 cents a share, up from $72.1 million, or 31 cents a share, a year earlier. The results beat analysts' average estimate by a penny, and were above American Eagle's projection of a profit of 35 cents to 36 cents a share.

Sales rose to $703.2 million from $602.3 million. Same-store sales, or sales at stores open at least a year, increased 2%.

The company's gross margin slipped to 45% from 45.7% as a result of increased markdowns, partially offset by higher initial prices on its clothes. Buying, occupancy and warehousing costs increased 20 basis points, largely because of higher rent costs related to openings of its aerie chain of loungewear stores.

For the third quarter, American Eagle forecasts earnings of 47 cents to 48 cents a share, compared with 44 cents a year ago. Analysts, on average, project earnings of 50 cents a share, according to Thomson Financial.

The company said it is "pleased" with its August sales so far.