NEW YORK (TheStreet) -- American Eagle Outfitters (AEO - Get Report) stock is dropping Wednesday after the teen retailer reported first-quarter revenue lower than expected and guided for below-consensus earnings for the second quarter. By market open, shares had tumbled 3.1% to $10.98.
In its first quarter ended April, revenue dropped 5% year over year to $646 million. Analysts surveyed by Thomson Reuters had expected sales a touch higher at $647.74 million.
For its second quarter ending July, management expects a high single-digit decline in comparable sales and breakeven earnings. Analysts had forecast profits of 4 cents a share.
Must Read: Why EBay (EBAY) Stock Is Lower This Morning
TheStreet Ratings team rates AMERN EAGLE OUTFITTERS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERN EAGLE OUTFITTERS INC (AEO) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
- You can view the full analysis from the report here: AEO Ratings Report