Apparel retailer American Eagle Outfitters Inc on Thursday forecast a bigger-than-expected fall in its revenue for the holiday quarter, blaming weak mall traffic and store closures stemming from the COVID-19 pandemic.
The company's shares fell 2.5% before the opening bell.
A surge in virus cases towards the end of last year led to consumers hunkering down at home again, further bruising sales of retailers which were hoping for a strong recovery in the crucial holiday shopping season.
American Eagle said fourth-quarter revenue for its flagship brand is expected to decline in the low double-digit range. However, its Aerie lingerie brand, which is not as heavily reliant on physical stores, faired better and is expected to post a revenue increase in the high-20% range.
Total fourth-quarter revenue is expected to fall by low single-digits, compared with analysts' estimates of a 0.14% dip, according to IBES data from Refinitiv.
The company also laid out its long-term financial outlook, ahead of its shareholder meeting later in the day, saying it targeted revenue of $5.5 billion in fiscal 2023. It had posted revenue of $4.31 billion in the last reported fiscal year.