American Eagle withdrew guidance and warned of a Q1 loss
American Eagle Outfitters Inc (NYSE:AEO) stock is down 5.7% at $11.99 this morning, after the apparel retailer withdrew its 2025 guidance “due to macro uncertainty.” The company now expects a first-quarter revenue decline of 5% to $1.1 billion, and comparable sales to fall 3% -- led by a 4% drop at its Aerie brand. American Eagle also warned of an $85 million operating loss, driven by heavy discounting and a $75 million inventory write-down tied to spring and summer merchandise.
American Eagle Outfitters stock is now down 51.2% year-over-year and 27.8% year-to-date. The shares rallied earlier this week alongside the broader market and briefly broke above their 80-day moving average -- a trendline that’s served as overhead resistance since early December -- but have since slipped back below it. AEO is also trading beneath the $12 level, which acted as resistance throughout most of April and early May.
Options traders are reacting swiftly to the selloff. So far, 19,000 puts have changed hands -- 44 times the typical options volume seen at this point in the session. The June 10 put is by far the most popular contract, with new positions being opened as traders brace for more downside.
This lines up with recent sentiment in the options pits, where puts have been picked up at a faster-than-usual rate. The stock's 50-day put/call volume ratio of 0.99 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other readings from the past year.
Echoing this, American Eagle stock's put/call open interest ratio (SOIR) of 1.94 ranks in the 77th percentile of annual readings. In other words, short-term options traders have rarely been more put-biased.