American Eagle Outfitters (AEO) has lowered its full-year guidance after reporting a small increase in revenue and narrowing profits in the first quarter.
In the three months to April 29, revenue at the US fashion retailer increased 2 percent to 1.1 billion billion dollars, with store revenue up 5 percent but digital revenue down 4 percent.
Breaking it down by brand, revenue at its namesake label dropped 2 percent to 671 million dollars, while revenue at Aerie rose 12 percent to 359 million dollars.
Total net income narrowed to 18.45 million dollars from 31.74 million dollars a year earlier.
“We entered 2023 with a cautious plan, balancing continued optimism for our brands with the flexibility to navigate uncertainty in the macro environment,” CEO and chair Jay Schottenstein told investors.
He said he was “pleased to note that this strategy delivered for us, as we successfully managed through the first quarter and achieved results in-line with plan”.
AEO lowered its full-year outlook based on its first quarter results. The company now expects revenue in the range of flat to down low-single digits, compared to its previous guidance of flat to up low-single digits.
Meanwhile, it expects operating income in the range of 250 million dollars to 270 million dollars, down from its previous estimate of between 270 million dollars and 310 million dollars.
Schottenstein said: “With ongoing macro challenges, we are maintaining a clear focus on inventory discipline, cost savings and efficiencies across the business.
“Looking forward, our priority is to rebuild operating margins, while also seeking opportunities for profitable growth and to deliver more consistent shareholder returns.”