American Eagle Outfitters announced quarterly earnings that were worse than expected, mainly because it had to write down $75 million worth of spring and summer merchandise. Earlier this month, the company withdrew its full-year financial guidance due to uncertain economic conditions.

CEO Jay Schottenstein said the first quarter was tough for the business. Although disappointed, the company is working to improve performance in the coming quarters. The retailer’s revenue for the quarter was $1.09 billion, matching expectations but down from $1.14 billion the previous year.

The company experienced an operating loss of $85.18 million, compared to net income of $77.84 million a year ago. After adjusting for one-time costs, the loss was $68.06 million. Sales fell 3%, with Aerie’s intimates and activewear dropping 4%, and the main American Eagle brand declining 2%.

American Eagle expects second-quarter revenue to decline by 5%, worse than the 4% analysts predicted. The company also projects lower gross margins and comparable sales down 3%. Operating income for the quarter is expected between $40 million and $45 million.

Executives noted that some spring products didn’t appeal to customers, and weather affected sales. The company plans to focus on stronger sales during the important back-to-school season.

American Eagle is reducing its sourcing from China to lower tariff risks. The CFO said tariffs could cost about $40 million this year, partly factored into current guidance.

The company is also working to finish a $200 million share repurchase program by the second quarter. So far this year, American Eagle’s stock has dropped about 33%.