American Eagle cuts annual revenue forecast on weak apparel demand

(Reuters) -American Eagle Outfitters Inc cut its full-year revenue forecast on Wednesday, as demand wavers for discretionary products, including apparel, due to still-high inflation.

Shares of the company fell about 10% after the bell.

Higher rent and product prices in the United States dented consumer spending, hurting demand for discretionary items as cash-strapped shoppers focused on essentials such as groceries.

Revenue for Aerie, a division that makes activewear, swimsuits and bralettes and which benefited after the pandemic struck as people stayed at home, recorded a 12% jump in the first quarter, while the company’s namesake division posted a 2% fall.

The company now expects annual revenue to be flat to down low-single digits, compared with its prior forecast of flat to up low-single digits.

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