### American Eagle Withdraws 2025 Guidance, Incurs $75 Million Write-Off Due to Sluggish Sales

In a response to disappointing sales figures and a challenging economic landscape, American Eagle has withdrawn its 2025 guidance and announced a significant $75 million inventory write-off related to their spring and summer merchandise. The retailer expects a 5% decline in revenue for the fiscal first quarter, which concluded in early May, bringing sales down to an estimated $1.1 billion.

American Eagle forecasts a 3% drop in comparable sales, with a notable 4% decline at its intimates brand, Aerie. This revelation follows earlier warnings from the company about a slow start to the first quarter, attributed largely to weak consumer demand and unfavorable weather conditions. As the quarter progressed, American Eagle resorted to heavy discounting to clear excess inventory.

The company is preparing for an operating loss around $85 million and an adjusted operating loss—excluding one-time restructuring charges—of approximately $68 million for the quarter. The larger-than-expected losses stem from increased discounting and the hefty $75 million write-down of unsold spring and summer goods.

CEO Jay Schottenstein voiced his dissatisfaction with the first quarter results, stating, "We are clearly disappointed with our execution. Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory. As a result, we have taken an inventory write down on spring and summer goods."

However, Schottenstein remains optimistic about the future, noting that the company has entered the second quarter in a stronger position with inventory levels more closely aligned to sales trends. "Our teams continue to work with urgency to strengthen product performance, while improving our buying principles," he added.

Given the uncertain economic conditions and the disappointing first-quarter performance, American Eagle has decided to retract its fiscal 2025 guidance. The company had previously positioned itself as having strong inventory levels to adapt to shifting customer preferences. However, unforeseen challenges such as inventory shortages in key categories, especially at Aerie, have compelled the retailer to reassess its future plans.

As American Eagle navigates this turbulent period, its focus remains on adapting to market demands and optimizing product offerings to better align with consumer needs.