TLDR
- American Eagle stock jumped 25% after Q2 earnings beat powered by Sydney Sweeney’s “Great Jeans” campaign
- The celebrity marketing push sold out in one week and generated 40 billion impressions
- UBS raised price target to $21.50, highlighting Aerie business improvements beyond marketing
- Revenue dropped 1% to $1.28 billion but company exceeded earnings expectations
- Tariff costs expected to hit $20M in Q3 and $40-50M in Q4
American Eagle stock soared 25% following the retailer’s second quarter earnings report. The company beat analyst expectations thanks to its controversial Sydney Sweeney marketing campaign.
CEO Jay Schottenstein credited the actress’s “Great Jeans” advertisement for driving profits. The campaign boosted brand awareness and customer engagement across multiple metrics.
The fall season launched strongly for American Eagle. Marketing partnerships with Sydney Sweeney and Travis Kelce helped increase comparable sales figures.
Sweeney’s campaign featured wordplay between “genes” and “jeans” while she modeled the clothing. The advertisement sparked intense debate across social media platforms.
Marketing Campaign Delivers Strong Sales
The Sweeney campaign sold out within one week of launch. Some individual items disappeared from inventory within 24 hours of release.
Chief marketing officer Craig Brommers praised the actress’s impact on new customer acquisition. The campaign reached unprecedented levels in just six weeks of operation.
Combined marketing efforts with Sweeney and Travis Kelce generated 40 billion total impressions. Executive creative director Jennifer Foyle highlighted this reach during Wednesday’s earnings call.
American Eagle plans to expand the Sweeney partnership later this year. The company will introduce new campaign elements despite the initial online controversy.
President Donald Trump called the advertisement “fantastic” while critics questioned its messaging. The polarized reactions only amplified the campaign’s visibility across social platforms.
Financial Performance Shows Mixed Results
Total revenue declined 1% to $1.28 billion in the second quarter. However, the company exceeded earnings per share expectations for the period.
American Eagle faces rising tariff costs in upcoming quarters. Management expects $20 million in additional expenses during Q3.
Fourth quarter tariff impacts could reach $40 million to $50 million. The company warned that price increases would continue to offset these costs.
This performance marks a turnaround from May’s challenging outlook. Schottenstein previously withdrew full-year guidance and reported a $75 million merchandise write-off.
UBS analysts raised their price target from $19 to $21.50 while maintaining a Buy rating. The investment bank emphasized Aerie business improvements beyond the celebrity marketing success.
The analysts believe product and merchandising enhancements drove quarter-over-quarter Aerie growth. These operational improvements suggest sustainable business momentum beyond viral marketing campaigns.
American Eagle expects ongoing price increases to help manage tariff pressures through the remainder of 2025.
