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American Eagle Outfitters on Tuesday withdrew its annual forecasts due to macroeconomic uncertainty and said it took a roughly $75 million inventory charge in the first quarter related to the write-down of its spring and summer merchandise.
Shares of the apparel maker slumped 10 percent in extended trade.
“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,” CEO Jay Schottenstein said.
American Eagle said it was “actively evaluating its forward plans.”
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Its adjusted operating loss for the first quarter included higher than planned promotions as well as a restructuring charge of about $17 million related to closing two fulfilment centres as part of its supply chain network optimisation project.
By Juveria Tabassum; Edited by Leroy Leo
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