AEO - American Eagle Outfitters slides after soft revenue guidance

2023-05-24 16:28:36 ET

American Eagle Outfitters ( NYSE: AEO ) slid in late trading on Wednesday after the mall retailer

Total revenue was up 2% to $1.1B during the quarter. Store revenue was up 5% during the quarter and digital revenue fell 4%.

Gross profit generated was up 6% to $413M, which was 38.2% of total sales vs. 36.8% last year. Merchandise margin expansion was driven by lower transportation costs with a partial offset from higher markdowns. Lower compensation and delivery costs also had a positive impact on margins offset by higher rent linked to new store openings.

American Eagle ( AEO ) ended the quarter with an inventory position down 8% to $625M. Inventory units were down 9%, with AE and Aerie inventory across the U.S. and Canada down at a  double-digits clip compared to last year. AEO said it is maintaining inventory discipline with the second quarter planned below the sales trend.

Looking ahead to Q2, AEO management guided for revenue to be down low-single digits in comparison to last year with operating income in the range of $25M to $35M. The revenue guidance fell short of the consensus expectations for a 1.4% increase. For the full year, revenue is seen being in the range of flat to down low-single digits with operating income in the range of $250M to $270M.

Shares of AEO fell 10.85% in postmarket trading.

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