Sam Boughedda

Investing.com — Shares of American Eagle Outfitters, Inc. (NYSE:) dived in early Friday trading after the company missed first quarter earnings estimates due to declining demand fueled by macro headwinds.

According to the retailer of clothing, increased demand from higher prices for gas and more than anticipated shifts in discretionary items had adversely affected its earnings, as well as rising prices.

American Eagle reported of $0.16 per share on revenue of $1.06 billion. Investing.com asked analysts to forecast earnings of $0.25 on $1.14 Billion in revenue.

“The first quarter proved challenging, with demand well below our expectations, pressuring operating profit,” said Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

He said, “In hindsight we were way too optimistic about our year-end plans.”

According to the company, topline growth will trend similar to that of the first quarter. The reason for this is higher markdowns in spring inventory and higher freight costs. It also reflects the effects of acquisitions within the supply chain.

AEO has lowered its outlook on the year. AEO now anticipates that revenue will rise in the single digits, compared with Fiscal 2021.

“We are taking swift measures to adjust our inventory and expense base with a firm goal of entering the second half better aligned with demand trends,” commented Schottenstein.