Aerie Q1 Comps -4%

Aerie comparable sales in the first quarter “are expected to be down” 4%, as parent company American Eagle Outfitters (AEO), which sells a variety of apparel types, reported revenue was projected to be down “roughly 5%” to “approximately $1.1 billion.” The final report for the period will be released May 29.

In the first quarter last year, Aerie sales were $372.65 million, up 3.8% from the same period in 2023, while its store comp sales were up 6%. Last year’s Q1 sales were the “all-time high first quarter revenue” for the intimates brand.

For AEO as a whole, “comparable sales are expected to be down approximately 3%,” with the American Eagle brand down 2% in the three months ended May 3. “Management expects a GAAP operating loss of approximately $85 million” for the  quarter. The company added that “the adjusted operating loss reflects higher than planned promotional activity in the quarter and an inventory charge of roughly $75 million related to a write-down of spring and summer merchandise,” for the combined company. “The GAAP operating loss includes an additional asset impairment and restructuring charge of approximately $17 million, primarily related to closing two fulfillment centers as part of its supply chain network optimization project.”

“At this time, the company is withdrawing its previously provided fiscal year 2025 guidance due to macro uncertainty and as management reviews forward plans in the context of first quarter results.” 

Said AEO CEO Jay Schottenstein, “we are clearly disappointed with our execution in the first quarter. 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. We have entered the second quarter in a better position, with inventory more aligned to sales trends.”