American Eagle experienced a significant drop in shares, attributing the decline to a forecast of stagnant gross margins for the upcoming quarter. The retailer contends with sluggish demand and an excess inventory problem. While the Aerie brand shows promise, it fails to balance out challenges faced by the American Eagle label.

American Eagle expects Q2 EPS of 22¢ and revenue of $1.37B; 12,000 shares could generate $500 monthly in dividends.

Here's a detailed look inside American Eagle's Q2 earnings report.

American Eagle Outfitters' shares slumped over 11% in premarket trading on Thursday