Overview

• The company posted an adjusted loss of $0.29 per share in Q1, falling short of expectations following a $75 million write-down on spring and summer merchandise.
• Revenue dipped 4.7% year-over-year to $1.09 billion, with comparable sales down 2% at American Eagle and 4% at its Aerie brand.
• American Eagle withdrew its full-year guidance and now predicts Q2 revenue will drop 5%, steeper than analysts’ 4.04% estimate.
• Gross margin narrowed to 29.6% from 40.6% a year ago due to heavier discounts and higher advertising, while inventory decreased 5% to $645 million.
• Leadership plans to finish a $200 million share repurchase this quarter and rebalance inventory to better match sales trends.