Michelle Chapman, AP Business Writer
American Eagle Outfitters stock fell on Wednesday after retailers retracted their financial outlook for the year citing “macro uncertainty,” saying it would write down $75 million in spring and summer products.
American Eagle said late Tuesday it expects first quarter revenue to slide 5%, or more than $1 billion. Sales in the same store, a key gauge of retailers’ health, are projected to fall by around 3%.
The Pittsburgh company foresees an operating loss of approximately $68 million for the first quarter adjusted operating loss due to inventory writing and heavier spending on promotions.
The company’s shares fell 7% early on Wednesday.
CEO and executive chairman Jay Schottenstein said the retailer was unhappy with the first quarter execution.
“The merchandising strategy did not drive the results we expected, leading to higher promotions and excess inventory,” Schottenstein said in a statement. “As a result, we wrote about stocks on spring and summer products.”
Many companies in multiple sectors have withdrawn their financial guidance this year as the US-led trade war has created uncertainty about the costs of imported goods. Massive changes in US trade policy have early signs that consumers are also becoming volatile and that Americans may be more wise about spending.
American Eagle cited the uncertainty of the macros that cited 2025 financial guidance as it reviews its plans for the future.
American Eagle has been in a better position over the second quarter, with inventory in line with sales trends.
“Our team continues to work together with urgency to enhance product performance while improving purchasing principles,” he said.
In a note to clients, Paul Lejuez of Citi Investment Research said he hopes American Eagle will actively cut inventory plans later this year and focus on cost management.
“The picture of demand is not very clear and there was margin pressure from tariffs, promotions and freight, making American Eagle in a difficult place to navigate the current uncertainty environment,” he writes.
American Eagle reported its first quarter financial results on May 29th.
Original issue: May 14th, 2025 10:10am EDT
