06:32 AM EDT, 05/14/2025 (MT Newswires) -- American Eagle Outfitters ( AEO ) shares fell early Wednesday as the clothing retailer said it expects to record a fiscal first-quarter operating loss amid inventory charges on its spring and summer merchandise, while the company withdrew its full-year outlook due to macro uncertainties.

The company anticipates to report an adjusted operating loss of roughly $68 million for the three-month period ended May 3, reflecting higher-than-planned promotional activity and an inventory charge of about $75 million related to the write-down of its spring and summer collection, it said late Tuesday. The stock slid 14% in the most recent premarket activity.

On a GAAP basis, management estimates an operating loss of around $85 million, including an additional $17 million asset impairment and restructuring charge, which is mainly related to the closure of two fulfillment centers as part of American Eagle's supply chain network optimization initiatives. In March, the company forecast operating income to be in a range of $20 million to $25 million for the first quarter.

"We are clearly disappointed with our execution in the first quarter," Chief Executive Jay Schottenstein said in a statement. "Merchandising strategies did not drive the results we anticipated, leading to higher promotions and excess inventory."

The retailer pulled its guidance for fiscal 2025 amid macroeconomic uncertainties, while management is "actively" evaluating its future plans in the context of its first-quarter results, according to Schottenstein. It previously expected revenue to decline by low-single digits for the fiscal year, while operating income was forecast to come in between $360 million and $375 million.

American Eagle is scheduled to report its final first-quarter results in May.

Revenue is projected to decrease by 5% year over year to about $1.1 billion in the first quarter, the company said, while the current consensus on FactSet is for $1.09 billion. The retailer previously expected its first-quarter revenue to be down by mid-single-digits.

Comparable sales are expected to decline by roughly 3% in the quarter, with the American Eagle and Aerie segments to be down 2% and 4%, respectively. The Street is currently estimating overall same-store sales to decrease by 2.9%.

"We have entered the second quarter in a better position, with inventory more aligned to sales trends," Schottenstein said. "Our teams continue to work with urgency to strengthen product performance, while improving our buying principles."