American Eagle Outfitters Inc. ( AEO ) shares are trading lower on Thursday in after-hours following the retailer’s report of weaker-than-expected financial results for the first quarter of fiscal 2025.

What To Know: The company posted a net loss of $64.9 million or 36 cents per share, missing analyst expectations of a 23 cents profit. Revenue came in at $1.09 billion, falling short of the $1.24 billion estimate.

The results were potentially driven by a 5% year-over-year revenue decline and a sharp contraction in gross margins, which dropped from 40.6% last year to 29.6% this quarter. The company cited inventory writedowns, higher product costs and deeper markdowns as key factors. Comparable sales declined 3% overall, with Aerie down 4% and the American Eagle brand down 2%.

In response, American Eagle provided second-quarter guidance projecting $40 to $45 million in operating income, with comparable sales expected to decline 3%. However, the company withheld full-year guidance, citing macroeconomic uncertainty and the need to reassess plans after the weak first quarter.

Despite the weak performance, the company is continuing a $200 million accelerated share repurchase program and has slightly reduced its full-year capital expenditure forecast from $300 million to $275 million.

AEO Price Action: American Eagle shares were down 7.78% at $10.31 after-hours Thursday, according to Benzinga Pro.

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