By Katherine Hamilton

Earnings from Abercrombie & Fitch, Gap and American Eagle Outfitters will offer investors more insight into how much customers are spending on discretionary items as tariffs and economic uncertainty weigh on consumer sentiment. American Eagle already shared preliminary results showing falling sales in the first quarter and withdrew its full-year outlook due to uncertainty, but Urban Outfitters surprised investors with higher-than-anticipated earnings across its brands.

Abercrombie & Fitch

Several analysts have lowered earnings estimates for Abercrombie & Fitch in recent days as the apparel retailer is set to report Wednesday. Raymond James analyst Rick Patel lowered projections because channel checks showed lingering demand softness for its namesake brand. Jefferies analysts led by Corey Tarlowe noted Abercrombie's promotions increased 1.6% this quarter, while average selling price is down 3% compared with the prior year. Tariffs also pose a threat, and Patel isn't confident the mall chain can increase prices given it targets younger customers. Analysts still expect first-quarter sales to increase slightly to $1.06 billion, up from $1.02 billion the year before.

Gap

Gap's promotion data looks more promising than Abercrombie & Fitch's, the Jefferies analysts say, as it was one of the few companies in the analysts' coverage with an increase in average selling price and a decline in promotions. Its Old Navy brand looks a bit weaker though, with the average price down 4% from last year. Gap reports first-quarter financials Thursday and is expected to record $3.42 billion in sales, ahead of the $3.39 billion it logged the prior year.

American Eagle Outfitters

American Eagle said earlier this month it had merchandise problems in the first quarter that led to markdowns, excess inventory and expected sales of about $1.1 billion, below the $1.14 billion it had the previous year. It withdrew its outlook, citing macroeconomic uncertainty and the new approach it would have to take in the context of its first-quarter results. The clothing retailer reports Thursday.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

May 27, 2025 13:14 ET (17:14 GMT)

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