American Eagle Outfitters Inc.’s fourth-quarter earnings slid as lower product costs were not enough to compensate for markdown-driven margin declines.

Profits fell 6.4 percent to $140.5 million, or 66 cents a diluted share, for the three months ended Feb. 2, as sales rose 2.3 percent to $995.4 million. Comparable-stores sales dipped 2 percent.

“We are prudently investing in the development of our brands and continuing to build long-term profitability,” chief executive officer Jim O’Donnell said.

First-quarter earnings are slated for 25 to 27 cents a share, down from 35 cents a year ago.

For complete coverage, see Thursday’s issue of WWD.