American Eagle soars as Sydney Sweeney ad stirs up demand

People walk past a campaign poster starring Sydney Sweeney which is displayed at the American Eagle Outfitters store, Friday, Aug. 1, 2025, in New York. (AP Photo/Yuki Iwamura)

Shares of American Eagle Outfitters soared nearly 24 per cent in premarket trading on Thursday as high-profile ad campaigns for its jeans and apparel with actor Sydney Sweeney and National Football League (NFL) star Travis Kelce, spurred demand.

American Eagle’s push to partner with celebrities comes at a time when U.S. retailers are grappling with weak discretionary spending on clothing and accessories among other non-essentials amid broader economic uncertainty.

Sweeny’s controversial “Great Jeans” campaign, advertising the company’s fall denim collection, generated “unprecedented new customer acquisition,” chief marketing officer Craig Brommers said in a post-earnings call.

In a bid to woo young consumers and Gen Z shoppers, the retailer has teamed up with Kelce’s clothing brand Tru Kolors, tennis player Coco Gauff and actor Jenna Ortega.

“A 25 per cent leap (in extended trading on Wednesday) also bakes in a lot of faith that the celebrity-fueled demand burst holds through the holiday seasons, which makes the move partly victory lap and partly future perfect tense,” said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors.

Meanwhile, American Eagle expects its quarterly comparable sales to rise by low single digits, compared with expectations of a 0.3 per cent decline, per data compiled by LSEG.

The retailer, which withdrew its annual forecasts in May, expects annual comparable sales to be flat compared to a year ago, while analysts estimated a 1.1 per cent drop.

“Q2 results eased concerns around execution and proved marketing momentum is translating into sales, driving a sharp stock re-rating,” said Lale Akoner, global market analyst at eToro, given the stock has been down about 18 per cent so far this year.

American Eagle’s forward price-to-earnings multiple, a common benchmark for valuing stocks, is 13.05, compared with peers Abercrombie & Fitch’s and Urban Outfitters’.

Short interest in the company, whose shares were trading at US$16.9 premarket, stood at 16.6 per cent of public float, per data compiled by LSEG.

Reporting by Kanchana Chakravarty in Bengaluru; additional reporting by Purvi Agarwal in Bengaluru; Editing by Sumana Nandy, Reuters