American Eagle Outfitters, Inc. ( AEO ) shares are trading lower Thursday. The company reported mixed third-quarter earnings and provided weak guidance for the holiday season. There have also been some analyst updates. Here’s what you need to know.

What To Know: The retailer reported earnings per share of 48 cents. Revenue came in at $1.28 billion, down 1% year-over-year and below the prior-year figure of $1.3 billion. The decline was attributed to a $45 million negative impact from a retail calendar shift. Comparable sales rose by 3%, slower than the 5% growth reported in the same quarter last year according to Benzinga Pro.

Aerie also posted a 5% increase in comparable sales, following a 12% rise in the prior year, while the American Eagle brand saw a 3% uptick, slightly improving from last year's 2% growth. Gross profit dipped 3% to $527 million, with gross margin declining to 40.9% from 41.8% due to higher markdown activity and expense deleverage linked to the calendar adjustment.

CEO Jay Schottenstein emphasized the positive momentum from the company’s “Powering Profitable Growth Plan,” citing a robust back-to-school season. However, he acknowledged significant challenges for the fourth quarter, including an anticipated 4% revenue decline and a modest 1% increase in comparable sales.

Analyst Update: JP Morgan analyst Matthew Boss downgraded American Eagle's stock from Overweight to Neutral, slashing the price target from $27 to $23. He noted that the third quarter revealed a “core miss,” flagging increased markdown pressures and unfavorable foreign exchange impacts as key risks. Boss also pointed to uneven consumer demand as a lingering concern, adding to the headwinds the retailer faces during the critical holiday season.

Bank of America and Telsey Advisory Group also joined in cutting price targets, now set at $21 and $20, respectively.

Outlook: The company's fourth-quarter guidance projected earnings of 46 cents per share, significantly below the consensus estimate of 59 cents. Management cited an $85 million revenue headwind from the retail calendar shift and persistent demand uncertainty as primary challenges.

AEO Price Action: American Eagle Outfitters ( AEO ) shares were down 13.7% at $17.68 at the time of writing, according to Benzinga Pro.

Read Next:

OPEC+ Extends Oil Output Cuts To Late 2026: What It Means For Markets

Image Via Shutterstock.