Shares of American Eagle Outfitters dropped on Wednesday after the company withdrew its financial outlook for the year, citing “macro uncertainty.” The retailer also announced a $75 million write-down on spring and summer merchandise.
On Tuesday evening, American Eagle projected that first-quarter revenue would decline by 5%, equating to a loss of over $1 billion. Same-store sales, a key indicator of retail performance, are expected to fall by about 3%. The company anticipates an adjusted operating loss of approximately $68 million for the first quarter due to the inventory write-down and increased spending on promotions.
Early Wednesday, the company’s stock fell by 7%. CEO and Executive Chairman Jay Schottenstein expressed dissatisfaction with the company’s performance in the first quarter, noting that its merchandising strategies did not meet expectations. This led to higher promotional spending and excess inventory, prompting the inventory write-down on spring and summer goods.
Like many companies across various sectors, American Eagle has withdrawn its financial guidance for the year, as uncertainty from the U.S.-led trade war affects the costs of imported goods. The shifting U.S. trade policies have caused unease among consumers, leading to signs that Americans may be becoming more cautious with their spending.
American Eagle pointed to macroeconomic uncertainty as the reason for retracting its 2025 financial outlook while it reviews future plans. Schottenstein expressed confidence that the company is better positioned for the second quarter, with inventory better aligned to sales trends.
Paul Lejuez of Citi Investment Research commented that he expects American Eagle to aggressively reduce its inventory plans for the latter half of the year and focus on controlling costs. He added that with demand uncertain and pressure from tariffs, promotions, and freight, American Eagle faces a challenging environment.
The company will report its first-quarter financial results on May 29.
