American Eagle Outfitters (AEO) PT Lowered at BMO Capital After 'Negative 1Q Pre-Announcement'

BMO Capital analyst Simeon Siegel lowered the price target on American Eagle Outfitters (NYSE: AEO) to $11.00 (from $15.00) while maintaining a Market Perform rating.

The analyst commented: "Negative 1Q Pre-Announcement on Inventory WriteDown & Promos; Post-close, AEO pre-announced 1Q revenues ~in-line with guidance/Street, but GM below given 1) an inventory write-down (we expect more leveraged to Aerie) representing a ~680bps headwind, and 2) higher-than-planned promos, driving 1Q Adj. EBIT ~$(68)mn (vs. prior guide of $20-25mn). Management withdrew previously issued FY25 guidance given macro uncertainty but noted they have entered 2Q "in a better position, with inventory more aligned to sales trends" and presumably with a nowplanned-lower cost base to help with 2Q GMs."

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