American Eagle Outfitters (NYSE:AEO) reported Q1 EPS of $0.16, $0.10 worse than the analyst estimate of $0.26. Revenue for the quarter came in at $1.06 billion versus the consensus estimate of $1.15 billion.
Outlook:
For the second quarter, management expects top-line growth to trend similarly to the first quarter with a gross margin rate of approximately 33%. This reflects higher markdowns to clear through spring inventory, higher freight costs and the impact of the supply chain acquisitions.
Incorporating shifts in the macro environment, the company is lowering its outlook for the year. Management expects operating profit to be above $314 million achieved in Fiscal 2019, with total revenue up in the low single digits compared to Fiscal 2021. The company expects to enter the second half better aligned with demand, with a more balanced inventory position and leaner expense base, driving improved margins and profitability relative to the first half.
The company will provide updates to the longer-term outlook once visibility into the macro and business trends improves.