NEW YORK, NEW YORK – AUGUST 01: Billboards of actress Sydney Sweeney is seen outside of an American Eagle store on August 01, 2025 in New York City. American Eagle’s recent denim ad campaign featuring Sweeney has drawn backlash for language and imagery that critics say echoes eugenics-era rhetoric, following a tagline referencing “great genes” alongside visuals of Sweeney in blue jeans. (Photo by Michael M. Santiago/Getty Images)
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American Eagle Outfitters has regained momentum thanks to two high-profile collaborations – the controversial Sydney Sweeney “Great Jeans” campaign and its follow-up with Travis Kelce and his Tru Kolors brand. Both collabs are new. Sweeney’s launched on July 23 and Kelce’s on Aug. 27 with AEO’s second quarter ending Aug. 2, yet early results signal strong brand performance ahead.
During the second quarter earnings call, CEO Jay Schottenstein reported “very strong demand from both campaigns, fueling positive traffic in August.” CMO Craig Brommers added, “This is a moment to take big swings,” noting that brand awareness, consumer engagement, and purchase intent are up. “We’ll be looking to convert this buzz into business all through the back half of the year.”
After the earnings report, AEO stock rocketed 24% in Thursday premarket trading, according to Reuters. Analyst Michael Ashley Schulman of Running Point Capital Advisors observed that the stock surge means there is “faith that the celebrity-fueled demand burst holds through the holiday seasons, which makes the move partly victory lap and partly future perfect tense.”
By The Numbers
It’s still early days, yet Jefferies reported AEO beat both top and bottom-line Street and guidance estimates. Total net revenues of $1.28 billion were down 1% over last year, while the first quarter guidance was forecast to be off 5%. Yet put into context, this quarter’s results were still positive since it was going up against the company’s highest-revenue generating second quarter in history at $1.29 billion last year.
Comparable sales also decreased by 1%, but this was better than guidance which expected a 3% fall. Operating income of $103 million almost doubled guidance in the $54 million range and was up 2% over previous year.
“It was a solid quarter, and we are encouraged by the progress, yet our work is not complete,” Schottenstein said, pointing to the continued need to improve operational efficiencies and speed through the supply chain.
He also noted that tariff’s impact will be felt in the second half of the year, but the company has been adjusting manufacturing sources that will prove more favorable in the long term.
Aerie Wins In Back-To-School
Aerie, American Eagle’s little-sister brand specializing in intimates, lounge, sleep and activewear, grew 3.2% in the quarter, up from $415.6 million to $429.1 million in 2025. It was a record-breaking second-quarter revenue performance for the brand after garnering strong sales for its back-to-school collections, especially in the intimates ranges.
Jennifer Foyle, president and creative director for American Eagle and Aerie, said intimates, which generate about one-third of brand revenues, haven’t gotten as much attention as deserved recently. That is about to change.
“We feel like it’s time for Aerie 2.0. We just launched a campaign that really highlights bras. So we’re really excited about talking about this whole new idea and leaning into a category that we haven’t been up to for a while. It’s time for intimates to come back,” she said in the earnings call.
The brand operates 325 stores and plans to open 30 Aerie and sub-brand Offline by Aerie locations this year.
Celebrity Collabs Give American Eagle Momentum
American Eagle was up against high comps in the second quarter, so its 3.2% revenue decline from $827.6 million last year to $800.4 million this year needs to be taken in context. It also got only a few weeks of positive results off the Sydney Sweeney “Great Jeans” campaign, which sparked a heated controversy in some circles for its sound-alike wordplay on “genes/jeans” in one of the ads.
“Genes are passed down from parents to offspring, often determining traits like hair color, personality, and even eye color. My jeans are blue,” the blue-eyed blonde said.
Critics argued the ad, since removed from its social channels, suggested American Eagle was promoting the superiority of white beauty and came close to eugenics messaging.
However the majority got the joke. A YouGov poll fielded Aug. 1 among 3,500 adults found the wordplay in the tagline “Sydney Sweeney Has Great Jeans” appropriate. Even President Donald Trump got into the fray, saying “I think her ad is fantastic!” after learning Sweeney is a registered Republican.
Despite the hubbub, CEO Schottenstein reported, “The iconic fall denim campaign with Sydney Sweeney affirms we are the American jeans brand. We saw record-breaking new customer acquisition and brand awareness, cutting across age demographics and genders.”
Brand president Foyle shared that the Sweeny Signature jeans collection sold out within a week and demand has been very strong for her online “Syd’s Picks” shop. Customer counts were up 700,000 in the quarter.
CMO Brommers added, “Consumer acquisition is coming from every single county in the U.S. This momentum is national, and it is pervasive. We are off to a start beyond our wildest dreams.”
And the Sweeney campaign combined with the American Eagle x Tru Kolors by Travis Kelce, which dropped after second quarter close but was timed to catch the wave of publicity surrounding his proposal to Taylor Swift, generated over 40 billion impressions so far.
“Travis is at the intersection of fandom and fashion. Sports is driving culture in a way that it has never done before. And Travis is driving interest in fashion like never before,” Brommers said.
“This collaboration is off to an incredible start, just dominating our men’s business over the course of the Labor Day weekend, building on the men’s momentum that started in July. We could not be more excited about these back-to-back campaigns,” he continued.
Ready For A Strong Second Half
Calling the Sydney Sweeney jean controversy a tempest in a teacup, GlobalData managing director Neil Saunders said Sweeney, along with the Travis Kelce collaboration, are bringing much welcome attention to the American Eagle brand.
He also observed that American Eagle tends to “come into its own” during the fall and winter months due to its strong outerwear and cold-weather apparel, plus its appeal for holiday gifting.
“With better execution and stronger product, American Eagle is positioned to make gains over the balance of the year,” he said and concluded, “While AEO has had a disappointing run, we do not believe the business is broken. It simply needs a little more pep in its step – and that now seems to be coming through.”
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