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American Eagle storefront with sale sign
(Joe Raedle/Getty Images)
“macro uncertainty”

American Eagle tumbles after warning of soft Q1 demand and yanking its full-year guidance

The Y2K-era retailer also said it wrote off $75 million worth of inventory.

Nia Warfield

Shares of American Eagle sank nearly 14% in premarket trading after the retailer posted disappointing preliminary Q1 results and pulled its full-year outlook.

The apparel brand now expects Q1 revenue to land around $1.1 billion — down 5% from a year ago. Comparable sales are expected to fall 3%, dragged down by a surprise 4% drop at its popular intimates line, Aerie.

Last quarter, AE warned that the year was off to a slower-than-expected start due to colder weather and softening demand. The company now expects an operating loss of about $85 million, or $68 million on an adjusted basis excluding one-time restructuring charges. The shortfall was driven by “higher than planned” discounting and a $75 million inventory write-down tied to unsold spring and summer merchandise.

American Eagle also pulled its fiscal 2025 guidance, citing “macro uncertainty” and the need to reassess its plans after a rocky start to the year. The company will drop full Q1 results next month. Shares were already down about 26% year to date before the latest dip.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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