American Eagle Shares Surge as Sydney Sweeney Ad Campaign Drives New Customers
Retailer reports record customer acquisition after divisive fall denim campaign and predicts low single-digit comparable-store sales growth for the rest of the year.
American Eagle Outfitters saw its stock jump sharply this week after the teen-focused retailer said a viral advertising push starring actor Sydney Sweeney drew a wave of new customers during its latest quarter.
Shares rallied in extended trading Wednesday and opened up as much as 31% on Thursday after the company reported second-quarter results and discussed the impact of its summer marketing efforts. Executives said the attention surrounding the fall denim campaign translated into increased store traffic and brand awareness that continued into August.
Chief Executive Jay Schottenstein told analysts late Wednesday that the company experienced "record-breaking new customer acquisition and brand awareness cutting across age, demographics and genders." He said traffic built throughout the second quarter and carried into August, helping American Eagle exceed expectations for the period.
The retailer, which had pulled its annual sales outlook in May citing economic volatility, said it now expects comparable-store sales to rise by low single-digit percentages in both the third and fourth quarters. That guidance came despite a recent period of soft sales: the company reported a 1% decline in sales for the May-to-July period, following a 5% drop in the prior quarter.
American Eagle rolled out the high-profile fall denim creative over the summer. The ads, which used the wordplay "genes" in place of "jeans" and starred the 27-year-old actor known for the HBO series Euphoria and White Lotus, prompted a public debate over race, Western beauty standards and cultural backlash to so-called "woke" advertising. Critics seized on the choice of a blonde-haired, blue-eyed lead; supporters and some analysts said the campaign nonetheless delivered heightened awareness and customer traffic.
The company has also been leveraging celebrity partnerships beyond the Sweeney spot, announcing a collaboration with NFL tight end Travis Kelce around the time of his widely publicized engagement to pop star Taylor Swift. Executives said the tie-ins and viral moments helped lift the brand's profile across demographics.
Analysts and investors reacted to the combination of elevated publicity and the retailer's quarterly performance. After the second-quarter report, American Eagle's shares rose sharply in after-hours trading Wednesday and showed substantial gains at the opening bell Thursday, reflecting investor optimism that the campaigns will translate into sustained sales growth.
American Eagle joins a string of apparel retailers that have seen marketing stunts and celebrity endorsements move not only public conversation but also short-term shopper behavior. The company said it will monitor the durability of the uptick in traffic and customer acquisition as it executes fall and holiday merchandising plans.
The retailer reported its quarterly results and executive remarks during a Wednesday call, and reiterated that while recent momentum is encouraging, it remains cautious given the uneven consumer backdrop that prompted the withdrawal of its full-year outlook in the spring. Management’s updated comparable-store sales expectation for the second half reflects that cautious, measured recovery as the company heads into the peak selling season.