TLDR
- American Eagle stock jumped 25% after Q2 earnings beat, driven by Sydney Sweeney’s controversial “Great Jeans” campaign
- The campaign generated 40 billion impressions and sold out within a week, with some items gone in a day
- UBS raised price target from $19 to $21.50, citing improved Aerie business performance beyond just marketing
- Company expects $20M tariff impact in Q3 and $40-50M in Q4, with ongoing price increases planned
- Total revenue still fell 1% to $1.28 billion despite marketing success
American Eagle stock rocketed 25% following the company’s second quarter earnings report. The retailer credited its controversial Sydney Sweeney marketing campaign for driving the impressive performance.
CEO Jay Schottenstein praised the actress’s “Great Jeans” advertisement during the earnings call. He said the campaign boosted both brand awareness and profits across the quarter.
The fall season started strong for the company. Schottenstein pointed to improved product offerings and successful celebrity partnerships as key drivers.
Sidney Sweeney in a commercial for American Eagle Jeans with a Mustang car👍🏻 She has Great Jeans & a Great car😁🙌🏻🙌🏻🙌🏻🙌🏻 #sidneysweeney #americaneagle pic.twitter.com/x4NLeLCGo0
— Henrey (@arikvarden) August 9, 2025
Marketing campaigns featuring Sydney Sweeney and Travis Kelce helped increase customer engagement. The company saw upticks in both awareness metrics and comparable sales figures.
Sweeney’s advertisement sparked widespread discussion across social media platforms. The campaign featured the actress making statements about genes and genetics while modeling American Eagle jeans.
The wordplay between “genes” and “jeans” created intense online debate. Some TikTok users criticized the ad as promoting problematic messaging about genetics.
President Donald Trump weighed in on the controversy, calling the advertisement “fantastic.” The polarized reactions only seemed to amplify the campaign’s reach.
Campaign Performance Delivers Results
According to Wednesday’s earnings call, the Sweeney campaign sold out within one week. Several individual items from the collection disappeared from shelves within a single day.
Chief marketing officer Craig Brommers called Sweeney a clear winner for the brand. In just six weeks, the campaign generated what he described as unprecedented new customer acquisition.
The combined marketing efforts with Sweeney and Kelce reached massive audiences. Executive creative director Jennifer Foyle reported the campaigns generated 40 billion total impressions.
The company plans to build on this marketing momentum moving forward. Brommers confirmed that the “Sydney Sweeney has great genes” messaging would continue throughout the year.
American Eagle will introduce new elements to the Sweeney campaign later in 2025. The company appears committed to extending the partnership despite the initial controversy.
Financial Challenges Remain
The strong marketing performance couldn’t completely offset broader financial headwinds. Total revenue declined 1% to $1.28 billion in the second quarter compared to the previous year.
American Eagle faces increasing pressure from tariff costs. The company expects $20 million in tariff impacts during the third quarter.
Fourth quarter tariff expenses could reach $40 million to $50 million. Management warned that price increases would be ongoing to offset these additional costs.
The retailer’s outlook represents a dramatic turnaround from earlier this year. In May, Schottenstein described a “challenging period” and withdrew the company’s full-year guidance.
The company also took a $75 million merchandise write-off in the first quarter. This represented goods that lost too much value to remain in inventory.
UBS analysts raised their price target on American Eagle stock from $19 to $21.50. The investment bank maintained its Buy rating on the shares following the earnings report.
The analysts believe the market may overemphasize the Sweeney campaign’s role in the quarter’s success. UBS pointed to improvements in the Aerie business as a more important long-term factor.
The Aerie division showed quarter-over-quarter improvement that extended beyond marketing efforts. UBS credited better products and improved merchandising for driving this performance.
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