Shares of American Eagle Outfitters are tumbling earlier than Wednesday’s opening bell after the retailer withdrew its monetary outlook for the yr citing “macro uncertainty” and mentioned it could write down $75 million in spring and summer season merchandise.
American Eagle mentioned late Tuesday that it expects first-quarter income to slip 5%, or greater than $1 billion. Similar-store gross sales, a key gauge of a retailer’s well being, are projected to fall about 3%.
The Pittsburgh firm foresees a first-quarter adjusted working lack of about $68 million as a result of stock write-down in addition to heavier spending on promotions.
The corporate’s inventory slumped greater than 14% in premarket buying and selling Wednesday.
CEO and Government Chairman Jay Schottenstein mentioned the retailer is sad with its execution in the course of the first quarter.
“Merchandising methods didn’t drive the outcomes we anticipated, resulting in greater promotions and extra stock,” Schottenstein mentioned in an announcement. “Consequently, we’ve got taken a listing write down on spring and summer season items.”
Numerous corporations throughout a number of sectors have withdrawn monetary steerage this yr as a U.S.-led commerce battle creates uncertainty about prices for imported items. The huge shift in U.S. commerce coverage has unsettled customers as nicely and there are early indicators which will People have gotten extra even handed about spending.
American Eagle cited macro uncertainty because it pulled it 2025 monetary steerage because it opinions future plans.
Schottenstein mentioned American Eagle is in a greater place for the second quarter, with stock extra aligned to gross sales traits.
“Our groups proceed to work with urgency to strengthen product efficiency, whereas bettering our purchasing ideas,” he mentioned.
Paul Lejuez of Citi Funding Analysis mentioned in a word to purchasers that he expects American Eagle to aggressively reduce its stock plans for the second half of the yr and to concentrate on value management.
“With the demand image much less clear and margin strain from tariffs, promos and freight, American Eagle is in a tricky spot to navigate the present unsure atmosphere,” he wrote.
American Eagle studies first-quarter monetary outcomes on Might 29.
