American Eagle shares slump on flat margin outlook, weakness in namesake brand
Summary
American Eagle shares fell sharply after the retailer forecast flat gross margins for the coming quarter. Sluggish demand and excess inventory are weighing on the namesake brand, while growth at Aerie has not offset the weakness.
The flat margin outlook signals that American Eagle faces both demand and inventory pressure, limiting
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The results expose the limits of Aerie's growth as the company tries to repair its larger and weaker namesake business.