American Eagle signals weak revenue growth in holiday quarter

A view of an American Eagle Outfitters store in Arlington, Virginia, U.S., June 1, 2021. REUTERS/Erin Scott

Jan 11 (Reuters) – American Eagle Outfitters Inc (AEO.N) on Tuesday signaled its revenue growth in the holiday quarter was hampered by supply chain snarls and disruptions caused by the Omicron surge, sending its shares down 2% in premarket trading.

The company forecast fourth-quarter revenue to rise in the mid-to-high teens percentage, lower than market estimates of 21.5% growth, according to Refinitiv data.

The weak outlook underscored the impact of a renewed surge in U.S. COVID-19 cases, which forced worsened staffing and inventory shortages at several retailers and forced some to cut operating hours during the busiest shopping period of the year.

Urban Outfitters Inc (URBN.O) said earlier in the day traffic at its stores reduced in November and December, while yoga-wear maker Lululemon Athletica Inc (LULU.O) had warned of a hit to sales from the Omicron coronavirus variant on Monday.

American Eagle rival Abercrombie & Fitch Co (ANF.N) has also given a disappointing sales forecast because of supply chain hurdles. read more

But Abercrombie said it sales have started rising in the post-holiday period, while American Eagle raised its long-term revenue target to $5.8 billion from $5.5 billion.

Reporting by Praveen Paramasivam and Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri and Aditya Soni

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