American Eagle’s Sales Surge Amid Viral Campaign

American Eagle’s stock saw a significant rise on Wednesday after the retailer adjusted its sales forecast upwards, buoyed by increased customer traffic linked to its viral advertising efforts. The campaign, featuring Sidney Sweeney in their jeans ads, appears to be a major contributor to this momentum.

In just six months, the company’s stock has jumped 136%, with around 50% of that happening in the last month alone. Over the past five days, it rose by 19%. The “Great Jeans” ad, launched in July, played a crucial role in this boost, alongside attention gained from collaborations with NFL star Travis Kelce and his brand, True Colors.

Now, American Eagle anticipates comparable sales to increase between 8% and 9% in the upcoming holiday quarter, a notable improvement from the 2.2% growth analysts had predicted based on data from LSEG.

Jay Schottenstein, the CEO, expressed satisfaction with the positive trends observed across various aspects of the business. He mentioned, “We are very pleased with the significant trend changes across our business, reflecting decisive actions from merchandising to marketing to operations, all of which are having a positive impact.”

Revenue climbed 6% in the third quarter, with comparable total sales rising by 4%. The outlook for the fourth quarter has been adjusted to reflect low single-digit growth in the 8% to 9% range, while operating income projections have improved to between $155 million and $160 million, up from a previous estimate of $125 million to $130 million.

Discussing the ongoing success into the fourth quarter, Schottenstein noted, “Our strong momentum continued into the fourth quarter, including a great start to the holiday season.” He highlighted a record Thanksgiving weekend, attributed to heightened demand across various channels, especially in their Aerie brand.

Interestingly, the ad featuring Sweeney stirred some controversy, with critics suggesting it echoed eugenics and regressive themes. In defense of the campaign, Schottenstein stated, “You can’t run away from fear. We stand by what we did.” He added that if he or his team had found the ad offensive, they would never have proceeded with it.

Overall, Schottenstein commented on the campaign’s impact, saying, “Our iconic fall denim campaign with Sidney Sweeney proves we are an American jeans brand. We have seen record new customer acquisition and increased brand awareness across age groups and genders.”