American Eagle Outfitters Inc said on Monday its second-quarter profit will likely be less than half of what Wall Street was expecting, citing weak sales and lower margins, sending its shares down 15 percent.
"We are not at all happy with our second quarter results," Chief Executive Robert Hanson said in a statement.
Continue Reading Below
The disappointment largely stemmed from poor sales of women's items and weak traffic, he said.
American Eagle said it now expects to earn about 10 cents per share, well below the average of 21 cents per share analysts were expecting, according to Thomson Reuters I/B/E/S.
American Eagle's shares fell to $16.95 in after-hours trading. They closed at $19.97 on the New York Stock Exchange on Monday.
The results were exacerbated by a highly promotional retail environment which intensified through July, Hanson added. American Eagle responded with deeper and broader mark downs, which allowed it to have a clean inventory position moving into the third quarter, he said.
Second-quarter net fell about 2 percent while comparable sales fell 7 percent, the company said.
American Eagle said it plans to report its full second-quarter results on August 21. The company said it earned 21 cents per share from continuing operations in the year-ago quarter.
(Reporting By Maria Ajit Thomas in Bangalore, additional reporting by Jessica Wohl in Chicago; Editing by Saumyadeb Chakrabarty, Bernard Orr)