Shares of American Eagle Outfitters jumped by 34% on Thursday after the popular teen clothing brand revealed that its new ad campaign featuring actress Sydney Sweeney attracted many new customers during the past quarter.
The campaign, launched over the summer, sparked conversations about various topics, including beauty standards and the reactions to “woke” culture in America. Some criticism focused on the campaign’s playful use of the word “genes” in place of “jeans,” which featured the blonde-haired, blue-eyed Sweeney, known for her roles in hit series like “Euphoria” and “White Lotus.”
Despite mixed reactions, American Eagle’s executives reported a significant increase in brand awareness and customer acquisitions during a recent earnings call. CEO Jay Schottenstein stated, “We saw record-breaking new customer acquisition across different ages and demographics.”
The retailer noted an increase in traffic throughout the second quarter that extended into August. The company now expects comparable-store sales to rise slightly in the upcoming quarters. Earlier this year, they had revised their annual outlook due to uncertainties in the global economy, but now anticipate that same-store sales will remain steady, thanks in part to this marketing boost.
Additionally, the brand benefited from another campaign featuring newly engaged NFL star Travis Kelce. In response to the criticism, American Eagle maintained that their focus was always on showcasing their clothing, not on race.
In contrast, rival retailer The Gap launched its own ad featuring the girl group KATSEYE, which received some commendation for its inclusiveness. Gap’s CEO, Richard Dickson, noted that their “Better in Denim” campaign garnered 400 million views, surpassing the total views of their previous four campaigns combined.
Some analysts suggest that while the reaction to the Sweeney campaign was strong, it did not significantly harm American Eagle’s sales. In fact, they are seeing promising momentum, aided by the ongoing partnerships, including the one with Travis Kelce.
For its last quarter, American Eagle’s revenue slightly declined by 1% to $1.28 billion. The company plans to continue its collaboration with Sydney Sweeney as they head into the later part of the year, introducing new aspects to the campaign. Overall, American Eagle’s shares have increased by 10% this year with this recent rise.
