Earnings Preview: American Eagle Outfitters (AEO) Q1 Earnings Expected to Decline

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for American Eagle Outfitters (AEO) due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on May 29, 2025, with a projected loss of $0.19 per share, reflecting a significant year-over-year decline of 155.9% [3]. - Revenues are forecasted to be $1.09 billion, down 4.6% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 9.52% over the last 30 days, indicating a bearish sentiment among analysts [4]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -30.35%, complicating predictions for an earnings beat [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likelihood of deviation from consensus estimates, with positive readings being more predictive of earnings beats [6][7]. - A positive Earnings ESP combined with a strong Zacks Rank increases the chances of a positive surprise, but American Eagle's current Zacks Rank is 3, making predictions uncertain [8][11]. Historical Performance - American Eagle has beaten consensus EPS estimates in the last four quarters, with a recent surprise of +8% when it reported earnings of $0.54 per share against an expectation of $0.50 [12][13]. Industry Comparison - Abercrombie & Fitch, a competitor in the retail apparel sector, is expected to report an EPS of $1.40, indicating a year-over-year decline of 34.6%, with revenues projected at $1.07 billion, up 5.3% [17]. - Abercrombie's consensus EPS estimate has also been revised down, resulting in an Earnings ESP of -4.22% and a Zacks Rank of 4, indicating challenges in predicting an earnings beat [18].