Investing.com -- Shares of American Eagle Outfitters , Inc. (NYSE: AEO ) tumbled 17% following the company’s decision to withdraw its fiscal year 2025 guidance amidst macroeconomic uncertainty. The apparel retailer also reported preliminary financial results for the first quarter ended May 3, 2025, that showed a decline in revenue and comparable sales, as well as an expected operating loss.

For the first quarter of 2025, American Eagle anticipates revenue to be around $1.1 billion, marking a decrease of about 5% compared to the same period the previous year, but about in-line with consensus.  Comparable sales are projected to drop by 3%, with the American Eagle brand down 2% and Aerie down 4%. The company expects a GAAP operating loss of roughly $85 million and an adjusted operating loss of about $68 million for the quarter.

The adjusted operating loss is attributed to higher promotional activity than planned and an inventory charge of approximately $75 million due to a write-down of spring and summer merchandise. The GAAP operating loss includes an additional asset impairment and restructuring charge of around $17 million, primarily from closing two fulfillment centers in an effort to optimize the supply chain network.

Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer, expressed disappointment with the company’s performance, citing inadequate merchandising strategies that led to increased promotions and excess inventory. Schottenstein noted that the company is entering the second quarter with inventory more closely aligned with sales trends and is actively reviewing forward plans to strengthen product performance and improve buying principles.