Retail giants like Walmart and Target have warned of a drop in consumer confidence lately. And now, somewhat-less-than-giant mall favorites are also sounding the alarm.
American Eagle, Dick’s Sporting Goods, Kohl’s, and Ulta all offered muted or downbeat guidance for FY 2025, with some forecasting single-digit sales and revenue drops. Executives said tariffs, inflation, and federal layoffs have left consumers spooked.
“Fear of the unknown”: American Eagle Outfitters, for instance, had record revenue of $5.3 billion last year and saw 4% same-store sales growth. But its Q4 sales dropped a bit from Q4 2023, and sales have been slow heading into 2025, CEO Jay Schottenstein said.
Consumers are cautious right now due to a “fear of the unknown. Not just tariffs, not just inflation,” he said. “You see the government cutting people off. They don’t know how that’s going to affect them. They see programs being cut; they don’t know how that’s going to affect them.”
“Against this backdrop,” Schottenstein said, “we currently expect full year revenue and operating income to be down relative to last year.” In its guidance for 2025, the clothing chain predicts a low-single-digit revenue decline.
Kohl’s foresees dismal ’25: Kohl’s, likewise, expects revenue to drop 5%–7% for FY 2025, far more than the 1.6% decline Wall Street analysts predicted. Same-store sales will be down 4%–6%, it estimates, and its EPS will fall within a range of just 10 to 60 cents, versus the $1.23 analysts had pegged it to.
The weak guidance, CFO Jill Timm said, was partly due to “uncertainty that the consumer is facing in the macro environment.” She also mentioned problems the chain is trying to address, such as changes to its brand mix that “polarized our core customer.” Consumers are feeling financially constrained and are “seeking out value,” CEO Ashley Buchanan said, and she expects this emphasis on value to “expand across income cohorts over the next, probably, three or four months.”
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Beauty chain Ulta also offered muted 2025 guidance, saying it foresaw same-store sales to be flat or rise just 1%, and for operating profit “in the low double digit range.” CFO Paula Oyibo cited “ongoing consumer uncertainty” as one reason for the dampened forecast.
Stress relief? Even sporting goods chain Dick’s, which had record-high sales in 2024, offered cautious 2025 guidance. Its predictions for sales of $13.6 billion to $13.9 billion and same-store sales growth of 1%–3% are in line with analysts’ estimates, CNBC reported, and its EPS forecast is a bit below them.
But Dick’s CEO Lauren Hobart struck an upbeat note. “We definitely are feeling great about our consumer,” she said during an earnings call, adding that she’s not seeing customers trade down in value. Sporting goods, she suggested, is one sector that may actually benefit from all this uncertainty: “Our consumer has proven that in times of stress and uncertainty, that they are leaning into [being] outdoors,” she said. “It makes sense because it is a way for people to find calm in an otherwise uncertain time frame.”