The stock of American Eagle Outfitters (AEO) is up 24% after the clothing retailer reported strong financial results for the year’s second quarter.
The Pittsburgh-based company announced earnings per share of $0.45 U.S., which was more than double the $0.21 U.S. expected among analysts.
Revenue in the period totaled $1.28 billion U.S., which beat the $1.24 billion U.S. that had been forecast on Wall Street. Sales were basically flat from a year earlier.
Management said the company’s heavily promoted partnership with actress Sydney Sweeney has been its best advertising campaign to date.
The company has also partnered with Taylor Swift’s new fiancé and NFL football player Travis Kelce on a new advertising campaign.
Executives at American Eagle said the ads have led to new customer acquisitions and positive traffic at its retail outlets and online.
The company re-instated its full-year guidance after withdrawing it earlier this year due to tariff uncertainty.
American Eagle Outfitters now expects comparable sales to be flat, which is actually better than a 0.2% decline that analysts had forecast.
The company is also expecting full-year operating income of $255 million U.S. to $265 million U.S., down from a previous range of $360 million U.S. to $375 million U.S.
Earlier this year, American Eagle struggled with tariffs and an uncertain consumer that’s being more selective when spending money on clothes.
To turn things around, American Eagle launched its campaign with Sydney Sweeney ahead of the back-to-school shopping season.
The Sweeney campaign has led to denim sellouts, double-digit traffic growth, and increased customer engagement, the company said in its earnings release.
Before today (Sept. 4), American Eagle’s stock had declined 20% this year and was trading at $13.62 U.S. per share.
