American Eagle Soars 20% on Earnings Beat, Star-Powered Campaigns
Retailer credits partnerships with Sydney Sweeney and Travis Kelce for driving strong Q2 results and a positive fall outlook.
American Eagle Outfitters (AEO) saw its shares surge more than 20% in after-hours trading after reporting fiscal second-quarter , attributing the robust performance to high-profile marketing campaigns with celebrities Sydney Sweeney and Travis Kelce. The apparel retailer posted earnings of 45 cents per share, more than doubling the 20-cent consensus estimate, with revenue hitting $1.28 billion against an expected $1.24 billion.
The company's strategic partnerships proved pivotal in driving customer engagement and sales. The campaign featuring actress Sydney Sweeney, which the company called its 'best' to date, led to double-digit traffic growth and denim sellouts. A newer collaboration with NFL star Travis Kelce also delivered impressive results, reportedly generating .
In a statement, CEO Jay Schottenstein noted an improvement in business ',' all of which exceeded the company's internal forecasts. While total comparable sales declined 1%, the dip was driven by a 3% decline in the American Eagle brand, partially offset by 3% growth at its Aerie intimates and activewear line.
Buoyed by the strong quarter, American Eagle reissued its full-year guidance, now anticipating comparable sales to be approximately flat, an improvement from previous projections. However, the company lowered its operating income forecast to a range of $255 million to $265 million, citing the impact of tariffs and a competitive retail environment. Despite these headwinds, management expressed optimism, noting that the crucial back-to-school and fall season is off to a positive start.