From Nasdaq: 2025-05-26 13:33:00

American Eagle Outfitters, Inc. (AEO) is set to announce its first-quarter fiscal 2025 results on May 29. The Zacks Consensus Estimate predicts a 4.6% decline in revenues to $1.1 billion and a loss of 25 cents per share, a significant drop from the year-ago quarter. AEO has a history of delivering earnings surprises.

Despite challenges, AEO remains focused on creating long-term value through its Powering Profitable Growth plan. The company faces macroeconomic pressures impacting consumer spending. Management expressed disappointment with the preliminary results due to increased promotions and excess inventory, leading to an inventory charge write-down on merchandise.

AEO withdrew its fiscal 2025 guidance, citing volatility, and expects first-quarter revenues to drop by nearly 5%. The company anticipates a GAAP operating loss of $85 million and an adjusted loss of $68 million due to promotional activity and inventory write-downs. Despite these challenges, AEO is working on optimizing operations for profitability.

From a valuation standpoint, AEO’s shares are trading at a discount compared to historical and industry benchmarks. With a forward P/E ratio of 9.4X, the stock offers value for investors. AEO’s shares have declined by 42.4% in the past six months, reflecting market challenges but also presenting an opportunity for investors.

Other retail stocks like DICK’S Sporting Goods, Inc. (DKS), Gap Inc. (GAP), and Burlington Stores, Inc. (BURL) have a favorable earnings outlook for their upcoming results. Each company is expected to show revenue and earnings growth in the first quarter of fiscal 2025. These stocks present potential opportunities for investors seeking exposure to the retail sector.



Read more at Nasdaq: American Eagle to Report Q1 Earnings: Will Soft Macro Trends Hurt?