American Eagle Stock Is Sliding Today: Here's Why

American Eagle Outfitters Inc. AEO shares are trading lower Wednesday after the company issued a profit warning and withdrew its full-year 2025 guidance.

What To Know: American Eagle shares fell nearly 15% in after-hours trading Tuesday, before bouncing back a bit in Wednesday trading. The company reported preliminary first-quarter results that revealed disappointing sales and a significant inventory write-down.

The retailer said it expects first-quarter revenue of $1.1 billion, a 5% decline from the prior year. Comparable sales are projected to be down around 3%, with the American Eagle brand down 2% and the Aerie brand down 4%. The company said it anticipates an operating loss of approximately $85 million, or $68 million on an adjusted basis.

American Eagle attributed the weak quarter to poor execution, citing ineffective merchandising strategies that led to higher-than-expected promotions and excess spring and summer inventory. As a result, the company recorded a $75 million inventory write-down.

CEO Jay Schottenstein acknowledged the misstep, stating that the company was “clearly disappointed” with its execution. He noted that results fell short of expectations and that inventory had not been aligned with consumer demand. Schottenstein also said the company entered the second quarter in a “better position,” which may be providing some relief on Wednesday.

American Eagle withdrew its full-year guidance due to broader macroeconomic uncertainty. While American Eagle said it entered the second quarter with better inventory positioning, the company is still actively reviewing its forward strategy and product performance.

The company will release full first-quarter results after the close on May 29 and will host a conference call to discuss the quarter in more detail at 4:30 p.m. that day.

AEO Price Action: American Eagle shares were down 4.13% at $12.20 at the time of publication Wednesday, according to Benzinga Pro.

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