American Eagle this week credited its Sydney Sweeney “great jeans” ads with driving stronger-than-expected sales and attracting new customers, but analysts said it was not clear how much of the company’s recent performance could be attributed to the controversial marketing push.
The company reported that its sales dropped 1 percent in the 13-week period that ended on Aug. 2 compared with the same period a year earlier. But it said demand grew over the quarter and the sales drop was less than it had expected. Its operating profit increased 2 percent, it said.
The retailer noted other bright spots. Its ad campaign featuring Ms. Sweeney, one of Hollywood’s most ubiquitous young stars, describing her “great jeans,” boosted awareness of the brand across all ages and genders in the second-quarter, Jay Schottenstein, American Eagle’s chief executive, told analysts during an earnings call on Wednesday. Critics had accused the campaign of championing white beauty standards with its wordplay on “great genes.”
Because the earnings period ended on Aug. 2, just days after the debut of the Sweeney campaign on July 23, there was little time for the company to assess its full impact on sales, especially during the back-to-school shopping period.
American Eagle shares surged 38 percent on Thursday to $18.79. The retailer’s stock price has risen about 13 percent this year. (Shares of Abercrombie & Fitch Co., a competitor, were trading at nearly $93.50 on Thursday.)
The company said it would have more marketing materials featuring Ms. Sweeney in the second half of this year. “‘Sydney Sweeney has Great Jeans’ is not going anywhere,” Craig Brommers, the company’s chief marketing officer, said on Wednesday.
Sales fell overall, but the Sweeney ad was a boost.
Same-store sales at American Eagle stores fell 3 percent in the three months ending on Aug. 2 compared with the same period a year earlier, but demand improved throughout the quarter, Jennifer Foyle, the company’s president, said. Same-store sales at Aerie, its loungewear and intimates brand, increased 3 percent from a year earlier.
Revenue fell 1 percent to $1.28 billion, while earnings per share rose to 45 cents, a 15 percent increase from a year earlier.
While there was not enough time to evaluate the impact the Sweeney campaign had on sales, the ads provided the company with a “brand and business reset” in the second quarter after its sales lagged in the first three months of the year, Mr. Brommers said.
Ms. Sweeney’s collection of signature jeans sold out within a week, Ms. Foyle said, and demand for products the actress curated on American Eagle’s website has been strong.
“Let me be very clear: Sydney Sweeney sells great jeans,” Mr. Brommers said. “She is a winner.”
American Eagle has been struggling in the face of inflation and sagging consumer spending, but executives said they expected its celebrity collaborations to boost business in the second half of this year.
In August, the retailer unveiled a collaboration with Travis Kelce’s lifestyle brand, Tru Colors, which will release 90 products in two drops.
Similar to Ms. Sweeney, the company approached Mr. Kelce, the Kansas City Chiefs star tight end who recently got engaged to Taylor Swift, because he is a “generational talent” with wide consumer appeal, Mr. Brommers said. Mr. Kelce “is driving interest in fashion like never before,” he added.
The two celebrity campaigns have created “amazing energy and buzz,” Ms. Foyle said.
Wait, what was the Sweeney controversy?
American Eagle’s stock surge on Thursday put an exclamation point on its Summer of Sweeney.
The company’s stock has risen 74 percent since it released its much-debated advertisement featuring Ms. Sweeney, which leans on a pun that both her “jeans” and “genes” are beautiful.
One ad from the campaign shows Ms. Sweeney, who is best known for her roles in “Euphoria” and “The White Lotus,” clad in American Eagle denim as she talks about genetic traits. The camera then zooms into her blue eyes as she says, “My jeans are blue.”
Critics accused the campaign and its tagline — “Sydney Sweeney has Great Jeans” — of seemingly championing eugenics and white beauty standards.
American Eagle’s stock rose by more than 23 percent to $13.28 on Aug. 4 when President Trump weighed in on social media, calling the campaign the “the ‘HOTTEST’ ad out there” and claiming that the retailer’s jeans were “flying off the shelves.” The stock fell nearly 10 percent the next day to just over $12.
American Eagle executives did not address the political controversy around the ads on Wednesday, but the company has previously said the campaign “is and always was about the jeans.”
When the ads were released, Ms. Foyle described the campaign as a “winning combo of ease, attitude and a little mischief.”
‘The jury is still out.’
Despite its better-than-expected second quarter, “the jury is still out” on whether American Eagle’s recent marketing success can drive a strong back-to-school season for the brand, Chris Nardone, an analyst with Bank of America, wrote in a research note on Thursday.
The quarter was encouraging, Mr. Nardone wrote, especially given the company’s lackluster start to the year. But he said he expected tariff pressures to eclipse the retailer’s short-term marketing buzz heading into the holiday season.
Ms. Sweeney helped drive sales of women’s jeans, shirts and dresses in the second-quarter, Jonna Kim, an analyst with TD Cowen, wrote in a research note on Thursday.
Still, questions remain about how much of the company’s recent performance can be attributed to its viral marketing and “the longevity of these campaigns,” Ms. Kim wrote.
Hannah Ziegler is a general assignment reporter for The Times, covering topics such as crime, business, weather, pop culture and online trends.
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