American Eagle faces challenging first quarter, withdraws 2025 guidance due to macro uncertainty
From CNBC: 2025-05-13 17:07:00
American Eagle is taking a hit, writing off $75 million in spring and summer stock. Revenue for the first quarter is expected to be around $1.1 billion, a 5% drop from last year. Shares dropped over 17% in extended trading due to slow sales and heavy discounting. CEO Jay Schottenstein expressed disappointment in the first quarter’s execution. The company is withdrawing its fiscal 2025 guidance due to macro uncertainty.
The retailer expects an operating loss of $85 million and an adjusted operating loss of about $68 million for the quarter. American Eagle took a $75 million inventory charge related to the write-down of spring and summer merchandise. Despite the setback, the company is optimistic about the second quarter, with a focus on improving product performance and buying principles. The impact of recent tariff policy changes on American Eagle remains unclear.
American Eagle’s slow start in the first quarter was attributed to weak demand and cold weather. The company faced higher-than-planned discounting and excess inventory, resulting in disappointing results. Management is actively evaluating forward plans in light of first quarter performance. Some companies anticipated tariff changes by buying inventory earlier, but American Eagle believed it was in a strong inventory position.
Read more at CNBC: American Eagle withdraws 2025 guidance, says Q1 worse than expected