In This Article:
(Bloomberg) -- American Eagle Outfitters Inc. pulled its guidance for the full year following a first quarter that was marred by discounting and a write-down of inventory, sending the stock down in New York trading.
Most Read from Bloomberg
-
As Coastline Erodes, One California City Considers ‘Retreat Now’
-
A New Central Park Amenity, Tailored to Its East Harlem Neighbors
In a preliminary earnings release, the apparel chain said comparable sales are expected to be down about 3% in the three-month period ended May 3. Revenue is projected to be about $1.1 billion, a decline of roughly 5% from a year earlier.
American Eagle shares slumped 6.2% at 9:35 a.m. in New York. The stock had declined 24% this year through Tuesday’s close.
The apparel chain said it’s withdrawing its outlook “due to macro uncertainty and as management reviews forward plans in the context of first-quarter results.” The company is registering a charge of about $75 million related to “a write-down of spring and summer merchandise.”
“We are clearly disappointed with our execution in the first quarter,” Chief Executive Officer Jay Schottenstein wrote in a statement. “Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory.”
Consumer companies from McDonald’s Corp. to Steven Madden Ltd. have posted uneven results in recent weeks as consumer sentiment wobbles amid President Donald Trump’s rapidly shifting trade policies.
Paul Lejuez, an analyst with Citi, said in a note to clients that American Eagle is expected to “aggressively” cut its inventory plans in the second half and focus on reducing costs.
“With the demand picture less clear and margin pressure from tariffs, promos and freight, AEO is in a tough spot to navigate the current uncertain environment,” Lejuez wrote.
(Updates share trading and adds analyst comment)
Most Read from Bloomberg Businessweek
-
DeepSeek’s ‘Tech Madman’ Founder Is Threatening US Dominance in AI Race
-
Why Obesity Drugs Are Getting Cheaper — and Also More Expensive
-
The Recession Chatter Is Getting Louder. Watch These Metrics
©2025 Bloomberg L.P.