American Eagle Outfitters Inc recently announced that its revenue growth during the holiday quarter was adversely affected by supply chain disruptions and complications resulting from the Omicron variant. These challenges have resulted in a decrease in the company’s shares by 2% in premarket trading. According to Refinitiv data, American Eagle had projected a mid-to-high teens percentage increase in fourth-quarter revenue, falling short of market expectations of 21.5% growth.

This weakened outlook underscores the significant impact of the resurgence of COVID-19 cases in the United States. The rise in cases has had a ripple effect on staffing and caused inventory shortages at various retailers, compelling some stores to reduce their operating hours during the peak shopping period of the year.

Urban Outfitters Inc also experienced a decline in store traffic during the months of November and December. Similarly, Lululemon Athletica Inc, a prominent yoga-wear brand, warned of a decrease in sales due to the Omicron variant.

Abercrombie & Fitch Co, a competitor of American Eagle, also provided a disappointing sales forecast due to supply chain hurdles. However, Abercrombie has reported an improvement in sales during the post-holiday period. Conversely, American Eagle has revised its long-term revenue target from $5.5 billion to $5.8 billion.

Overall, American Eagle and other retailers have encountered numerous obstacles during the holiday season due to disruptions caused by the Omicron variant and supply chain complexities. Although the future remains uncertain, these companies are actively working to overcome these challenges and adjust to the evolving retail landscape.

Useful links:
Omicron Variant Fears Rattle US Retail Sector – Reuters
American Eagle shares slump on weak holiday quarter outlook – Business Standard