American Eagle, a U.S. clothing retailer, reported a slower than expected start to 2025, citing reduced consumer spending. On March 12, 2025, CEO Jay Schottenstein indicated that the company is taking steps to manage inventory and expenses amid uncertain economic conditions.
- American Eagle reports slower consumer spending.
- CEO anticipates improvement in Spring season.
- Shares dropped 5% after earnings report.
- Comparable sales up 3%, Aerie driving growth.
- Current quarter sales expected to decline.
- Economic uncertainty affecting retail sector broadly.
American Eagle’s recent performance reflects broader concerns in the retail sector. The company warned investors about a decline in consumer demand and noted that the first quarter of 2025 is off to a slower start than anticipated. This caution comes amid persistent inflation and economic uncertainty affecting consumer spending habits.
In its fiscal fourth quarter, American Eagle posted earnings per share of 54 cents, surpassing analysts’ expectations of 50 cents. Revenue remained steady at $1.60 billion, in line with forecasts, although sales dropped slightly from $1.68 billion a year earlier. Comparable sales increased by 3%, outperforming expectations of 2.1%.
- Earnings per share: 54 cents vs. 50 cents expected
- Revenue: $1.60 billion vs. $1.60 billion expected
Despite these results, American Eagle anticipates a mid-single-digit sales decline for the current quarter, contrasting with analysts’ expectations for a 1.3% increase. For the full year, the retailer expects low single-digit sales declines, while analysts projected a 3% growth. The company’s challenges mirror those faced by other retailers, indicating a potential slowdown in discretionary spending as economic conditions remain uncertain.
In summary, American Eagle’s outlook for 2025 reflects a challenging retail environment, with expectations for declining sales amid broader economic concerns. The company’s mixed holiday results and proactive measures to manage expenses highlight the ongoing struggle within the apparel sector.
