American Eagle Outfitters Faces Revenue Decline Amid Economic Uncertainty

American Eagle Outfitters is facing significant challenges as it anticipates a decline in revenue for the first quarter and the full fiscal year 2025 due to weaker consumer demand and pressures from macroeconomic factors such as tariffs and inflation. The company expects mid-single-digit revenue declines in Q1 FY25 and low-single-digit decreases for the year, with gross margins also projected to decrease year-over-year. CEO Jay Schottenstein remarked that the start of 2025 has been slower than expected, attributing this to budget constraints faced by consumers and adverse weather conditions. Despite a modest growth of 1% in total net revenue for 2024, analysts predict American Eagle will struggle to maintain its momentum in a more cautious retail environment. The company's proactive measures include efforts to strengthen sales and manage inventory while reducing expenses. Overall, the outlook reflects a broader trend of uncertainty impacting the retail sector as consumer spending tightens.