FILE PHOTO: Clothing is seen for sale in an American Eagle Outfitters retail store in Manhattan, New York, U.S., May 13, 2016. REUTERS/Mike Segar
(Reuters) – Shares of American Eagle Outfitters Inc (AEO.N) dropped 14% on Wednesday after the apparel retailer withdrew its full-year forecast and said current-quarter results would be significantly hit by coronavirus-related store closures.
The owner of the Aerie clothing brand said it saw signs of falling customer traffic and waning demand early in March before announcing nationwide store closures later that month. (bit.ly/2RXDpps)
Like several U.S. companies, the retailer has already suspended its share buyback program, furloughed employees, deferred its first-quarter dividend payout and said on Wednesday it would raise $400 million to weather the dent caused by the pandemic.
American Eagle said it was uncertain how soon store traffic would reach pre-pandemic levels once stores reopen, and that could mean further hit to its full-year sales.
To counter some of the headwinds, American Eagle said it would start a curb-side pick-up service, like most non-essential retailers have, next week.
Shares of the company, which have lost nearly half their value so far this year, fell as much as 15% to $7.10.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Shinjini Ganguli