American Eagle Outfitters sent ripples through the retail sector this week after scrapping its full-year 2025 outlook, citing a steeper-than-expected sales decline in the first quarter. The apparel brand, long a staple in American malls and youth culture, reported weaker results that caught analysts and investors off guard, and prompted an immediate market reaction.
The company's revenue dropped 1% to $1.14 billion for the quarter ending May 4, missing Wall Street’s expectations. Net income slid to $7.6 million, or 4 cents per share, a sharp decrease from $18.5 million, or 9 cents per share, in the same period a year ago. Even adjusted earnings — a metric often watched by investors for its cleaner view of operations — barely reached 17 cents per share, falling short of the anticipated 28 cents.
“Sales trends through late April were softer than expected,” said CEO Jay Schottenstein in a statement. While he expressed confidence in the company’s ability to drive profit improvements in the second half of the year, Schottenstein acknowledged that the uncertain retail environment had pushed the company to retract its 2025 guidance — a rare move that signals deeper volatility ahead.
The decision spooked investors. Shares of American Eagle fell more than 4% in early trading following the announcement. While the company said it was “not making a practice of updating guidance intra-quarter,” the withdrawal reflected internal concern that external headwinds — from consumer spending fatigue to inventory management — could make forecasting unreliable.
American Eagle, like many apparel retailers, faces increasing competition from fast-fashion giants, evolving consumer tastes, and a tough economic climate. The brand has doubled down on its omnichannel strategy in recent years, but slower foot traffic and higher promotional activity continue to pressure margins. In an earnings call, executives noted that momentum picked up again in May, suggesting that the worst may be over, but for now, the company is bracing for continued turbulence.
About American Eagle Outfitters
Founded in 1977, American Eagle Outfitters (AEO) is a leading U.S.-based specialty retailer offering casual apparel, accessories, and personal care products under two core brands: American Eagle and Aerie. While the flagship American Eagle brand targets teens and young adults with denim and streetwear-inspired collections, Aerie has carved out a loyal following for its body-positive marketing and intimate apparel offerings.
Headquartered in Pittsburgh, Pennsylvania, the company operates hundreds of stores across North America and has a growing international presence. AEO has become known for its deep-rooted brand identity, youth-focused campaigns, and agile retail strategies, though recent quarters have tested the resilience of its business model in an unpredictable economic landscape.
