American Eagle Outfitters Stock Drops After Disappointing Profit Forecast
Shares of American Eagle Outfitters (AEO) fell by 13.97% on Thursday after the apparel retailer issued a weaker-than-expected profit forecast for its fiscal third quarter. While AEO reported an 8% year-over-year revenue increase to $1.4 billion in Q2, performance was mixed between its two brands. Aerie, AEO's intimate apparel brand, saw strong growth with comparable sales up 19% and total revenue rising by 25%. However, the main American Eagle brand experienced a decline in comparable store sales of 1%, attributed to shifting fashion trends. The company is discounting inventory heavily, which has reduced merchandise margins. Looking ahead, AEO projected operating income between $110 million and $115 million for Q3—well below analysts' expectations of around $124 million. This lackluster guidance disappointed investors.
Tickers: $AEO
Topics: apparel profit_forecast retail