NEW YORK ( TheStreet) -- American Eagle Outfitters ( AEO) is one of the few retailers that still can't manage to top last year's earnings.

While American Eagle was hurt by charges related to the shuttering of its money-losing Martin + Osa chain, the teen retailer also forecast disappointing second-quarter earnings, citing margin pressure from weaker business trends early in the quarter.
American Eagle

As a result, shares of American Eagle are tumbling 9.3% to $13.95 in early morning trading Wednesday.

The lower-than-expected outlook is overshadowing American Eagle's strong gross margins of 39.7%. American Eagle was one of the few teen retailers that managed to beat margin estimates.

During the first quarter, the teen retailer earned $10.9 million, or 5 cents a share, compared with $22 million, or 11 cents in the year-ago period. Excluding charges, American Eagle actually earned 17 cents a share, in-line with analysts' estimates.

American Eagle sales rose 8% to $659.5 million from $612 million.

Looking ahead, American Eagle foresees second-quarter earnings in the range of 12 to 16 cents a share, significantly less than Wall Street's outlook of 22 cents a share.

This weak outlook could also be a result of higher inventory levels and not enough product improvement, UBS analyst Roxanne Meyer wrote in a note.

-- Reported by Jeanine Poggi in New York.

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