Shares of US fashion retailer American Eagle have jumped after the company said that its tie-ups with celebrities Sydney Sweeney and Travis Kelce are expected to drive strong sales.
The firm’s stocks surged 25% in after-hours trading on Wednesday as its boss Jay Schottenstein said its second-quarter performance “exceeded expectations“, forecasting further success from sales boosted by its viral ad campaigns.
American Eagle made headlines with its divisive “Great Jeans” ad for its denim line featuring Sweeney, sparking a debate over race and beauty standards.
The firm also launched a clothing range with athlete Kelce, just after news broke of his engagement to popstar Taylor Swift.
Sales slipped 1% over the May-July period, after sliding 5% in the previous quarter, the company said on Wednesday.
But executives, who had pulled the firm’s annual sales forecast in May, citing economic uncertainty, said they now expected sales growth in the coming months in the “low single digits”, as purchases of everything from denim to underwear increase.
The autumn season is off to a positive start, said Mr Schottenstein.
“Fuelled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales.”
The Emmy-nominated actress, of Euphoria fame, appears in a jeans advertisement where she says: “Genes are passed down from parents to offspring, often determining traits like hair colour, personality and even eye colour. My jeans are blue.”
The viral advertisement, which was seen online, on storefronts and posters and across social media, drew intrigue and offence.
Some critics interpreted the ads as a play on eugenics, the discredited belief that humanity could be improved through selective breeding.
American Eagle has stuck by the advert, saying it is referring only to the company’s denim jeans.
The campaign had been intended to be a “reset” for the company, a long-time staple of teen fashion that entered the year in a sales slump, chief marketing officer Craig Brommers told financial analysts on Wednesday.
The ad drew some 40 billion impressions and helped Sweeney’s signature jeans selling out within a week of the campaign’s launch.
The controversy even made it to the White House, with President Donald Trump chiming in to support the actress.
“Sydney Sweeney, a registered Republican, has the HOTTEST ad out there,” he wrote in a Truth Social post in August. “Go get ’em Sydney!”
An American Eagle executive said during the company’s second-quarter earnings call that there is more in store with Sweeney and Kelce, responding to whether the firm can keep up its momentum.
The company also warned analysts that it expected tariffs to add roughly $70m in costs over the second half of its financial year. It said those costs had been more than halved from what the company had initially estimated, thanks to negotiations with suppliers to cut costs and shifts in sources.
It is also raising some prices, but executives said that was not the primary way it had reduced the impacts of tariffs.
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