The $75 Million Spring Freeze: Unpacking Weather's Impact on American Eagle Outfitters (AEO)

AEO's latest earnings call revealed how a "cool spring" iced seasonal sales, forced heavy promotions, and contributed to a massive inventory write-off on spring/summer goods.

“When it reported fiscal fourth-quarter results in March, American Eagle warned that the first quarter was off to a “slower than expected” start, due to weak demand and cold weather. Conditions evidently worsened as the quarter progressed, and the retailer turned to steep discounts to move inventory.” — CNBC

The first fiscal quarter (February through March) of 2025 had tremendous headwinds, most of which were man-made, but Mother Nature played a significant role as well.

It was not unexpected, and I discussed it in this mid-January dispatch —

Looking Ahead: Colder Spring '25 Means Tough Sledding for US Retailers

Expected colder trends to challenge demand for spring merchandise and pressure margins

The 2025 spring selling season will likely be colder, perhaps even much colder, than 2024, when the US experienced its third warmest spring selling season (February to April) in 130 years.

This represents a significant headwind for US retailers, which will pressure margins and challenge CEOs and …