American Eagle cautioned investors on Wednesday about a slowdown in consumer spending, resulting in a “slower start” to the year than anticipated. CEO Jay Schottenstein mentioned in a press release that the first quarter of 2025 has been slower due to weaker demand and colder weather. Despite the challenges, the company is taking proactive measures to boost sales, manage inventory, and cut expenses.
The company’s shares dropped about 5% in extended trading following the downbeat commentary and weak guidance for the upcoming quarter and year. This aligns with a trend where various retailers, both strong and struggling, have issued cautious statements about the current economic conditions.
Although American Eagle reported mixed holiday results, it exceeded expectations in earnings per share and revenue for the fiscal fourth quarter. The company’s net income for the period was $104 million, with sales slightly down from the previous year. Comparable sales were up 3%, driven by Aerie’s performance.
Looking ahead, American Eagle expects a decline in sales for the current quarter and full year. Tariffs are also anticipated to impact results, with plans to reduce exposure to China to mitigate costs. Despite challenges, the company is focused on enhancing profitability and addressing product availability issues.
In response to declining mall traffic, American Eagle is revamping its store fleet and plans to remodel a significant number of stores in the coming year. The company is adapting to the changing retail landscape and consumer behavior to stay competitive in the market.
Source link
This article was complied by AI and NOT reviewed by human. More information can be found in our Terms and Conditions.
