Why American Eagle Stock Is Plunging After Hours: 'This Is An Unprecedented Time In Retail'

American Eagle Outfitters Inc AEO shares are trading lower in Wednesday's after-hours session after the retailer reported weak financial results and warned of continued margin pressures.

American Eagle said second-quarter revenue was flat year-over-year. The company reported quarterly revenue of $1.2 billion, which was in line with average analyst estimates, according to Benzinga Pro.

American Eagle reported second-quarter earnings of 4 cents per share, which missed average analyst estimates of 14 cents per share.

"This is an unprecedented time in retail. As we cycle exceptional demand from last year, a tougher macro environment is impacting consumer spending behavior. Second quarter performance reflected these challenges, constraining revenue and amplifying margin pressure as we fully cleared through excess spring and summer goods," said Jay Schottenstein, executive chairman and CEO of American Eagle.

American Eagle said current third-quarter demand trends "remain difficult, with brand revenue down in the high-single digits following exceptional growth and a record Back-to-School season last year."

Assuming current trends continue, American Eagle sees third quarter gross-margin rates in the mid-30s and fourth quarter gross-margin rates in the low-30s. 

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AEO Price Action: American Eagle has a 52-week high of $26.08 and a 52-week low of $10.82.

The stock was down 14.67% in after hours at $9.89 at time of publication.

Photo: Mike Mozart from Flickr.