American Eagle Outfitters Stock Slips Following Updated Guidance: Retail Sentiment Dips

Shares of American Eagle Outfitters Inc. ($AEO) fell 5.4% on Monday after the retailer’s raised fourth-quarter guidance on profits but lowered revenue outlook, dampening retail sentiment.

The retailer said its holiday sales exceeded expectations with growth across brands. Its fourth quarter-to-date comparable sales are up in the low single digits, tracking ahead of its recent guidance of positive 1% with positive trends seen at American Eagle and Aerie.

The company said its operating profit for Q4 is expected to be about $135 million, up from its previous guidance of $125 million to $130 million.

The company’s revenue is expected to be down 5% because of a calendar shift that will impact sales by $85 million during the fourth quarter and $60 million for the full year, according to the company.

“As a top destination for holiday shopping, we achieved record sales in December. We came to market with exciting new product assortments and engaging customer experiences, resulting in growth across brands and selling channels,” Jay Schottenstein, AEO’s executive chairman and CEO said in a statement. “We also remain focused on driving operational efficiencies, putting us on track to deliver high-teens operating profit growth in 2024.”

Retail sentiment on Stocktwits turned ‘extremely bearish’ from ‘neutral’ a week ago. Message volumes rose to ‘extremely high’ from ‘high.’

AEO sentiment meter and message volumes on Jan 13

The company noted that in the fourth quarter-to-date, it has repurchased 1.5 million shares for $27 million, bringing year-to-date repurchases to 7.5 million shares for $158 million. It now has 22.5 million shares remaining for repurchase under the current authorization.

AEO stock is down 8% year-to-date.

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