Make Room Next to Sears… American Eagle’s March to the Retail Graveyard Has Begun

If you’ve walked through a mall recently (and I mean actually walked through it, not just sprinted to the Cinnabon while your kids played hide and seek in Macy’s) you’ve probably felt it. That eerie silence. The kind of quiet that used to mean “mall’s closed” but now just means “every store’s dying.”

There’s always a lonely Claire’s still barely clinging to life, propped up by teens getting their ears pierced and one employee who’s definitely too old to be selling scrunchies. There’s a pretzel stand with more staff than customers. And maybe, if you’re lucky, a guy screaming into his AirPods in the middle of a Sunglass Hut like he’s pitching his startup to Mr. Wonderful on Shark Tank.

This is the modern mall. A slow, retail rot setting in. And if you’re wondering how Amazon and Temu are printing money while your local American Eagle looks like the set of a zombie movie… well, let’s just say you don’t need an Ivy League graduate to figure it out.

Speaking of, American Eagle just gave up on their 2025 financial plans and admitted they flushed $75 million worth of spring and summer inventory down the toilet.

The numbers are bad. First-quarter revenue is expected to fall 5% year-over-year. Comparable sales are down 3%. Their “growth engine” Aerie is down 4%. And the bottom line showed an operating loss of $85 million, or $68 million when you squint and pretend the write-downs don’t count. Wall Street responded the only way it knows how: the stock immediately dipped 5% like it just saw the ghost of Bed Bath & Beyond (although, I guess it could be worse).

Even CEO Jay Schottenstein couldn’t spin this one. “We are clearly disappointed with our execution,” he said, which is as close as a public company ever gets to saying, “We done goofed.” What he really means is they placed the wrong bets, bought too much of the wrong stuff, and now they’re stuck trying to practically give it away. What makes it worse is that just two months ago, American Eagle thought it was fine. Back in March, they told investors everything was peachy, inventory was under control, and their buying strategy was dialed in. So that obviously didn’t age well.

Citi’s Paul Lejuez piled on, predicting that American Eagle’s next move will be to cut inventory and “focus on cost control.” This is really their only option at this point. But let’s not pretend this is just an American Eagle issue. This is retail in 2025. The same slow, painful script we’ve seen play out a dozen times before. First comes the “we’re optimistic about the future” earnings call. Then come the discounts, the missed targets, the inventory write-downs, and finally… the press release nobody reads because the store's already empty.

We’ve seen this movie. It starred JCPenney, which tried to rebrand as trendy right before filing for bankruptcy. Bed Bath & Beyond thought coupons could save them. They ended up liquidating everything from blenders to bath mats. Sears (remember them?) they were basically Amazon before Amazon. Now they’re a trivia question. Even Forever 21, once the go-to spot for $12 nightclub dresses, had to hit the bankruptcy reset button.

Now American Eagle’s up next, trying to dodge the same fate while hoping Gen Z decides they’re suddenly into pre-distressed denim again. Based on the numbers, they’re clearly not.  If they’ve got any shot at redemption, it’s by leaning hard into the current trend of pants so wide they could double as camping gear.

The company claims it’s heading into Q2 in a “better position.” Maybe so. But they already tested the TikTok influencer route with an Addison Rae partnership, and that didn’t exactly move the needle. If that was their big swing at staying relevant, it didn’t land… and now there aren’t a whole lot of obvious plays left.

So go ahead and update the mall graveyard directory. Right between Sears and Forever 21, pencil in a fresh plot for American Eagle. They haven’t flatlined yet… but let’s just say the pulse is getting harder to find.

PS: It’s a mess out there.

One day the market’s ripping, the next day it’s Black Monday all over again. Recent earning’s reports have been a total coin flip. One stock beats and explodes 30%… the next misses by a penny and gets sent to the Shadow Realm. And through it all, everyone’s begging for Jerome Powell to finally cave and cut rates.

But underneath all the panic headlines (“Inflation too sticky!” “Recession imminent!” “Tariffs round 4 incoming!”) something wild is happening…

We’re seeing violent price action. Especially in the small-cap space, where low floats and high anxiety are creating the perfect recipe for 100%+ pops before lunchtime. Some of these names are moving 200%+ in under 24 hours… and to our knowledge, NO ONE else is covering them.

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