American Eagle Outfitters Inc. suffered its worst stock decline in more than five years after holiday sales missed analysts’ estimates, stoking concerns about a company that had been outshining the rest of the teen-apparel industry.
Same-store sales rose 4 percent in November and December, the Pittsburgh-based company said in a statement Friday. Analysts estimated growth of 5 percent, according to Consensus Metrix.
Investors have viewed American Eagle as a bright spot in a struggling apparel market. Rivals such as Aeropostale Inc. and Abercrombie & Fitch Co. have seen sales plummet in recent years, hurt by shifting consumer tastes and a decline in mall traffic. With American Eagle, Wall Street had “elevated expectations,” according to Cowen & Co. analyst Oliver Chen. That’s given the company less margin for error.
“Merchandise margins were solid based on our checks, but we do believe weekly traffic was likely volatile,” he said in a report.
The shares fell 17 percent to $13.24 in New York, the biggest single-day drop since May 2010. The stock gained 12 percent in 2015.
American Eagle gave interim Chief Executive Officer Jay Schottenstein the job permanently last month. The executive, who has served as the company’s chairman since 1992, had been temporary CEO since January 2014.