Global specialist retailer American Eagle Outfitters (AEO) has withdrawn its financial guidance for fiscal year 2025 (FY25), citing the prevailing macroeconomic uncertainty and management needs to reevaluate future strategies in light of the results of the recent Part I (Q1).

Preliminary financial data for the company for the first quarter showed that expected revenue was about $1.1 billion, down about 5% compared to the same period last year.

The expected comparable sales figures show about 3%, the U.S. Eagle brand fell 2%, while the Aerie's decline fell 4%.

During the quarter, AEO planned a generally accepted accounting principles (GAAP) operating loss around $85 million and estimated adjusted operating loss to $68 million.

The company noted that the adjusted promotions added promotions that exceeded the initial plan and that inventory costs were close to $75 million due to price cuts in spring and summer merchandise.

GAAP operating losses include asset barriers and additional costs of restructuring, totaling approximately $17 million.

The fee is primarily related to the closure of the two fulfillment centers, part of the AEO initiative to optimize its supply chain network.

"We are disappointed with the first quarter execution. The commodity strategy did not drive the results we expected, resulting in higher promotions and excessive inventory. As a result, we wrote stocks on spring and summer merchandise.

“We are already in the second quarter where inventory is more aligned with sales trends. In addition, we are actively evaluating our forward plans. Our team continues to urgently strengthen product performance while improving our purchasing principles.”

In fiscal year 24, AEO reported its total net income of $5.32 billion, up 1% from $5.26 billion in fiscal year 233.

“American Eagle Outfitters withdrew its fiscal 25-year Outlook as Q1 revenue dropped by 5% initially created and published by the branded retail Insight Network owned by GlobalData.

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