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REUTERS/DAVID ‘DEE’ DELGADO/FILE PHOTO
An electronic billboard displays an American Eagle ad campaign featuring Sydney Sweeney in New York City, on Aug. 21. American Eagle Outfitters shares surged 26% in premarket trading today, fueled by renewed shopper interest in the retailer following a controversial jeans ad campaign featuring actor Sydney Sweeney.
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REUTERS/MARIO ANZUONI/FILE PHOTO
Cast member Sydney Sweeney attends a special screening for the film ‘Americana’ in Los Angeles, Calif., on Aug. 3. American Eagle Outfitters shares surged 26% in premarket trading today, fueled by renewed shopper interest in the retailer following a controversial jeans ad campaign featuring actor Sydney Sweeney.
American Eagle Outfitters shares surged 26% in premarket trading today, fueled by renewed shopper interest in the retailer following a controversial jeans ad campaign featuring actor Sydney Sweeney.
The “Great Jeans” campaign, which faced backlash on social media over perceived racial undertones related to genetic traits, nonetheless delivered what Chief Marketing Officer Craig Brommers called “unprecedented new customer acquisition,” during the company’s post-earnings call on Wednesday.
American Eagle is also benefiting from its partnership with National Football League (NFL) star Travis Kelce’s clothing brand Tru Kolors, further amplifying the company’s reach among young shoppers.
The company said that customer counts were up more than 700,000 since the launch of the campaigns with Sweeney and Kelce, and the ads have generated 40 billion impressions.
American Eagle is banking on celebrity-led campaigns to win over Gen Z and boost demand among shoppers who are pulling back on spending amid economic uncertainty.
“Q2 results eased concerns around execution and proved marketing momentum is translating into sales,” said Lale Akoner, global market analyst at eToro.
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HOLIDAY BUMP?
American Eagle executives said on Wednesday that they would keep the momentum from the ad campaigns going.
“Sydney Sweeney Has Great Jeans is not going anywhere. Sydney will be part of our team as we get into the back half of the year, and we’ll be introducing new elements of the campaign as we continue forward,” CMO Brommers added.
American Eagle forecast flat annual comparable sales, compared with analysts’ estimate of a 1.1% drop.
“(The) collaborations were, and are, genius in successfully driving traffic, conversion and sales. These collaborations are only getting started … with the NFL season on the horizon and more to come from both collaborations in a meaningful way during the holiday season,” Barclays analyst Adrienne Yih wrote in a note.
“So long as the marketing is in play for 2H25, we expect AE brand to beat current guidance for 2H25.”
American Eagle’s forward price-to-earnings multiple, a common benchmark for valuing stocks, is 13.05, compared with peers Abercrombie & Fitch’s 8.94 and Urban Outfitters’ 12.13.
Short interest in American Eagle, whose shares were trading at $17.09 premarket, stood at 16.6% of public float, per data compiled by LSEG.