American Eagle Outfitters (AEO) stock is experiencing a pre-market plunge of 6.26% on Friday, following the release of disappointing first-quarter fiscal 2025 results and a weak second-quarter outlook. The apparel retailer reported a significant earnings miss and provided a gloomy forecast for the upcoming quarter, causing investors to reassess their positions.

For the first quarter ended April 30, American Eagle Outfitters reported a loss per share of $0.36, significantly missing the analyst consensus estimate of a $0.22 loss and marking a stark contrast to the $0.34 earnings per share reported in the same period last year. The company's quarterly revenue fell 4.7% to $1.089 billion, slightly below analysts' expectations. Comparable sales declined by 3%, with the American Eagle brand down 2% and Aerie brand dropping 4% compared to the previous year.

Adding to investor concerns, American Eagle Outfitters provided a weak outlook for the second quarter of fiscal 2025, anticipating a 5% decline in revenue and a 3% drop in comparable sales. The company has also withdrawn its fiscal 2025 forecasts due to ongoing macroeconomic uncertainties, including potential tariff impacts. These projections, coupled with the poor Q1 performance, have led to a significant sell-off in AEO shares as investors reassess the company's near-term prospects in a challenging retail landscape.