Shares of Gap and American Eagle Outfitters tumbled by double-digit percentages following their latest earnings reports. Both retailers reported disappointing results that surprised investors.
Executives at both companies, however, insisted the economy is not to blame for their struggles. They attributed the weak performance to internal issues rather than broader macroeconomic trends.
Gap’s management pointed to operational challenges, including inventory mismanagement and supply chain disruptions. The retailer also faced declining sales across its brands, such as Old Navy and Banana Republic.
American Eagle cited similar internal missteps. The company struggled with inventory levels and failed to connect with younger shoppers through its product offerings.
Neither retailer suggested that consumer spending was falling due to economic pressures. Instead, they focused on the need to improve execution and brand relevance.
The market reaction was harsh, with Gap shares falling over 20% and American Eagle dropping more than 15%. Analysts noted that investor confidence was shaken by the lack of external excuses.
The companies now face pressure to address their operational shortcomings. Analysts expect them to outline clearer turnaround plans in the coming quarters.
For now, both retailers remain optimistic about consumer demand. They believe focusing on internal fixes will revive growth without needing a stronger economy.
