American Eagle (NYSE:AEO) warned investors on Wednesday that consumers are pulling back on spending and it’s seen a “slower start” to the year than it expected.
“Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather,” CEO Jay Schottenstein said in a news release.
“While we anticipate improvement as the Spring season gets underway, we are also taking proactive steps to strengthen the top-line, manage inventory and reduce expenses. As we navigate through an uncertain consumer and operating landscape, we will also remain focused on our long-term strategic priorities.”
The downbeat commentary, which came along with weak guidance for the current quarter and year ahead, is the latest warning sign that the consumer might be slowing down as shoppers contend with persistent inflation and concerns around tariffs.
Over the past couple of weeks, a string of other retailers, including both strong companies and ones that tend to struggle, issued weak guidance and cautious commentary about the current macroeconomic conditions and warned 2025 might be a weaker than expected year for sales.
Earnings per share came in at 54 cents vs. 50 cents expected, on revenue: $1.60 billion vs. $1.60 billion expected.
The company’s reported net income for the three-month period that ended Feb. 1 was $104 million, or 54 cents per share, compared with $6.31 million, or three cents per share, a year earlier.
Sales dropped to $1.60 billion, down slightly from $1.68 billion a year earlier. Similar to other retailers, American Eagle benefited from an extra week in the year-ago period, which has negatively skewed results.
AEO shares took on 13 cents, or 1.1%, to $11.58.
