American Eagle Shares Drop 13 Percent Amid Weak Holiday Sales Forecast

American Eagle Outfitters saw a significant drop in its stock price after releasing its third-quarter earnings report. The company's weak holiday forecast and revised full-year forecast have raised concerns among investors. American Eagle is facing challenges due to a shift in consumer behavior, with shoppers becoming more selective about their spending.

Revenue and Earnings

The company narrowly missed revenue expectations but exceeded earnings per share estimates. However, it has not met sales targets for three consecutive quarters. CEO Jay Schottenstein acknowledged the inconsistent demand between major shopping events, which is a trend seen in the retail industry.

Holiday Quarter Expectations

American Eagle expects a modest increase in comparable sales for the holiday quarter but anticipates a decline in total sales. The company has revised its full-year sales growth expectations down and now expects comparable sales growth to be lower than previously estimated.

Aerie Brand Success

Despite the challenges, American Eagle's Aerie brand has reported strong demand and achieved record revenue in the third quarter.

Industry Outlook

The company's cautious outlook contrasts with some competitors who have adopted a more optimistic tone. American Eagle's ability to navigate these challenges will be closely monitored by investors and analysts.

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