June 3, 2020 / 1:44 PM / a month ago

American Eagle posts bigger-than-expected loss on virus-led store closures

Clothing is seen for sale in an American Eagle Outfitters retail store in Manhattan, New York, U.S., May 13, 2016. REUTERS/Mike Segar/Files

(Reuters) - American Eagle Outfitters Inc posted a steeper-than-expected loss on Wednesday, as sales and store traffic plummeted following coronavirus-led store closures, sending shares down as much as 10.5%.

The retailer, which withdrew its annual forecast in April, has experienced a drop in demand for its jeans and popular Aerie brand apparel, which include intimates and athleisure.

The Aerie brand recorded a revenue decline of 2%, compared with a 28% rise a year ago. Revenue at the American Eagle label fell 45% during the quarter.

The company also suspended its second-quarter dividend and does not anticipate declaring a dividend for the rest of this year to preserve liquidity.

American Eagle also said its net loss stood at $257.2 million, or $1.54 per share, compared with a profit of $40.8 million, or 23 cents per share, a year earlier, mainly due to an impairment charge of about $156 million related to COVID-19-induced closures of 272 stores.

Excluding one-time items, the company reported a loss of 84 cents per share in the first quarter, larger than analysts’ average estimate of a loss of 30 cents per share, according to IBES data from Refinitiv.

Total revenue fell nearly 38% to $551.7 million during the quarter ended May 2, also missing market expectations of a revenue of $634.3 million.

Reporting by Aditi Sebastian; editing by Uttaresh.V

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