Actress Sydney Sweeney proved a jean genie for AEO but Martha Stewrat will be the brand’s holiday season face. Photographer: Michael Nagle/Bloomberg
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American Eagle Outfitters Inc. posted third-quarter results that outpaced expectations as the retailer raised its outlook and left weakness earlier this year in the rear view mirror.
The apparel company cooked up a storm earlier this year when adverts extolling actress Sydney Sweeney’s genes/jeans caused the kind of controversy a brand can hardly buy.
American Eagle said its quarterly revenue rose 6% to a record” $1.4 billion, which was ahead of Wall Street’s expectations for revenue of $1.3 billion, with earnings of 53 cents per share also above forecasts of 44 cents a share.
Thanks to the stronger sales trends, American Eagle raised its fiscal fourth-quarter operating-income guidance to in the range $155 million to $160 million, based on projected growth for same-store sales in a range of 8% to 9%.
Previous guidance suggested operating income of $125 million to $130 million, with comparable sales assumptions in the low single digits.
For the year, the company increased its adjusted operating-income guidance rises to the range $303 million to $308 million, with comparable sales in the low single digits, from an earlier projection of adjusted operating income between $255 million and $265 million on flat comparable sales.
Same-store sales at its Aerie intimates stores, which sell merchandise including bralettes, leggings and other lingerie and loungewear, rose 11% in the fiscal third quarter to Nov. 1.
American Eagle Beats Expectations
It all amounted to a tale of good news for American Eagle, which is recovering rapidly after pulling its full-year guidance in May because of widespread discounts and a writedown of inventory.
Since then, the company has revamped its apparel offering while grabbing the spotlight with high profile advertising — including the notorious campaign featuring actress Sydney Sweeney. It has also featured NFL star Travis Kelce, set to marry Taylor Swift, in its marketing push.
Together, the celebrity-led marketing campaigns generated “unprecedented” new customer acquisition for the brand, with customer counts up 700,000 over the summer period, according to the company.
Investors responded positively to the financial update, with American Eagle shares up around 13% in pre-market trading Wednesday. If those gains hold, the apparel retailer will be up around 20% in the year to date and an impressive 100% since the lows of the early summer.
Lifestyle guru Martha Stewart will be the new multi-generational face of the brand. (Photo by Arturo Holmes/Getty Images)
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Despite the success of the Sweeney-led campaign, lifestyle personality and businesswoman Martha Stewart has just been announced as the next face of the company’s jeans ads.
American Eagle on Tuesday announced a partnership with the celebrity homemaker – no stranger to controversy herself but now back at the top of the redemption arc – for the latest chapter of its holiday campaign, entitled ‘Give Great Jeans’.
Beyond Gen Z For American Eagle
The tie-up is part of the retailer’s efforts to position denim as a universal gift while expanding beyond its Gen Z focus to a multigenerational audience of both gift givers and recipients through the presence of Stewart, who is easily recognized by older and younger generations alike, according to Chief Marketing Officer Craig Brommers.
“I’m extremely pleased with the significant trend change across our business reflecting decisive steps taken from merchandising to marketing to operations — all having a positive impact. Record third quarter revenue was highlighted by Aerie’s double-digit comparable sales increase and positive growth at American Eagle, contributing to results that exceeded expectations,” Jay Schottenstein, Executive Chairman of the Board and Chief Executive Officer, AEO Inc, said.
“Strong momentum has continued into the fourth quarter, including an excellent start to the holiday season. We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth at Aerie and Offline. We are focused on finishing the season strong and sustaining our success into 2026 and beyond,” the American Eagle boss added.