Aerie grew revenue 25 percent to $535.8 million in the second quarter of 2026, with comparable sales up 19 percent, and brand president Jennifer Foyle says the gains come from chasing white space competitors ignore.

The figure extends a run of outsized growth at the American Eagle Outfitters-owned intimates brand. In the first quarter of this year, revenues jumped 33 percent and comparable sales rose 25 percent. Foyle, who serves as president and executive creative director of both Aerie and American Eagle, laid out the strategy at the Wharton Baker Retailing Center CEO Summit in Manhattan, in conversation with Fortune senior writer Phil Wahba.

"We have to innovate everyday. So we're playing around with new ideas right now," Foyle said.

What is driving the growth?

A key engine is internal brand-building rather than collaborations. In July last year, Aerie launched Overslept, a "sleepwear-to-streetwear" concept — clothes customers can sleep in and wear for errands. Sleepwear started "taking hold" last year, prompting the launch.

"The Aerie girl keeps on crying for more," Foyle said. "Now we haven't launched [Overslept] necessarily as a brand yet, but we're certainly allocating more square footage to it because it's doing that well right now."

The company has not disclosed separate revenue figures for Overslept, so its contribution remains unverified against the headline growth numbers.

Offline by Aerie, the activewear subbrand launched during the pandemic, now operates more than 100 freestanding stores. Foyle said she trademarked the name overnight, then added leggings as a deliberate price-point play.

"I saw that white space. I thought we could disrupt from a price-point standpoint," she said. Launching a brand during COVID, when many stores including Aerie were closed, was "sort of brave," she acknowledged.

What about American Eagle?

The parent chain is the laggard. Foyle described American Eagle as underperforming and said turnaround work is underway, including new strategic hires and store closures.

"There was some work to do. It's still underway," she said. "We've had some store closures. We're in some tough malls. We want to be in the best malls."

She cited 80 percent brand awareness and a customer base of more than 21 million across the brand portfolio as untapped cross-shopping potential — moving American Eagle customers into Aerie and Offline shoppers into American Eagle. No timeline was given for the turnaround, and she conceded "some of this doesn't happen overnight."

Her operating guidance for the portfolio: "Make sure you plan conservatively, but know that there's an outcome, and look for that outlier." She pointed to Ralph Lauren as proof that brand-led turnarounds hold: "They wouldn't have come back if they didn't have the soul of that brand."

Does AI factor into the sourcing side?

Foyle drew a line between AI in operations and marketing. Aerie will participate in AI "with demand forecasting and tools," she said, while keeping customer-generated content central — early customers acted "like our first influencers," part of the brand's no-airbrushing positioning since its 2006 launch against what she called the "behemoth," Victoria's Secret.

"There are more natural ways to get your customer into your brand, and I'm very passionate about that," Foyle said. She offered no specifics on which forecasting tools or vendors Aerie is deploying, leaving the AI commitment at the level of stated intent rather than a confirmed implementation.

With Aerie and Offline gaining floor space, Overslept expanding within existing square footage, and American Eagle still in restructuring mode, Foyle frames the near term as a market-share game in a low-growth retail environment — and she said she is stepping on the gas where the momentum already sits.