American Eagle Outfitters (AEO) saw its stock price plummet 7.85% in after-hours trading following the release of its first-quarter fiscal 2025 results and second-quarter outlook. The apparel retailer reported disappointing earnings that fell short of analysts' expectations, reflecting ongoing challenges in the retail sector.

For the first quarter, American Eagle posted a loss per share of $0.36, significantly missing the analyst consensus estimate of $0.23. This represents a stark 205.88% decrease from the $0.34 earnings per share reported in the same period last year. The company's quarterly revenue came in at $1.089 billion, slightly below the estimated $1.094 billion and down 5% year-over-year. The adjusted loss per share stood at $0.29, further highlighting the company's struggles during the quarter.

Adding to investor concerns, American Eagle's outlook for the second quarter of fiscal 2025 failed to inspire confidence. The company forecasts a 5% decline in revenue and a 3% drop in comparable sales for Q2. While American Eagle projects operating income between $40 million and $45 million for the upcoming quarter, the expected continued decline in sales has likely contributed to the sharp sell-off in after-hours trading. As macroeconomic uncertainties persist, investors appear to be reassessing their positions in the retail sector, particularly in companies facing growth challenges like American Eagle Outfitters.