American Eagle Posts Sharp Sales Drop

Teen clothing retailer American Eagle Outfitters Inc posted a bigger-than-expected drop in February same-store sales on Thursday and its first-quarter outlook missed estimates, sending its shares down nearly 8 percent.

The company said its sales at stores open at least a year fell 4 percent in February, hurt by lower customer traffic and weak sales of women's clothes. Analysts on average had expected a decline of 2.4 percent, according to Reuters Estimates.

Total sales rose 5 percent to $175.1 million for the four weeks ended March 1.

The company said it sees same-store sales continuing to decline in the first quarter and expects higher merchandise markdowns.

American Eagle forecast fourth-quarter earnings per share of 66 cents. For the first quarter, it sees earnings per share in the range of 25 cents to 27 cents.

Analysts forecast the company to earn 65 cents per share in the fourth quarter and 35 cents per share in first quarter.

Shares of American Eagle sank 7.9 percent to $19.60 in pre-market trading.