The stock of American Eagle Outfitters (AEO) is down 5% after the U.S. clothing retailer issued weak forward guidance and warned that it is seeing a slowdown in consumer spending.
The Pennsylvania-based company announced earnings per share (EPS) of $0.54 for the fourth quarter of last year, which was ahead of consensus estimates that called for $0.50. Revenue in the period totaled $1.60 billion, which matched Wall Street’s expectations. Sales were down 5% from a year earlier.
Despite the Q4 2024 results, American Eagle issued downbeat guidance. “Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather,” said the company in its earnings release, adding that they are navigating an “uncertain consumer and operating landscape.”
Weak Outlook
For the current quarter, American Eagle said that it expects a mid-single-digit decline in sales. Analysts had expected revenue to increase 1.3% in the first three months of this year. For all of 2025, the company is expecting sales to decline by a low single digit, compared with expectations for 3% growth.
Management also said that tariffs are likely to impact its future results, noting that the company sources about 20% of its products from China. American Eagle’s outlook is the latest warning sign that the U.S. consumer and economy might be slowing down as shoppers contend with persistent inflation and rising concerns around tariffs.
In the past few weeks, retailers from Abercrombie & Fitch (ANF) to Dick’s Sporting Goods (DKS) also issued weak guidance warned about deteriorating macroeconomic conditions. AEO stock has declined 30% so far this year.
Is AEO Stock a Buy?
The stock of American Eagle Outfitters has a consensus Hold rating among 10 Wall Street analysts. That rating is based on one Buy and nine Hold recommendations issued in the last three months. The average AEO price target of $17.33 implies 51.35% upside from current levels. These ratings might change after the company’s latest financial results.
Read more analyst ratings on AEO stock
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