American Eagle Stock Surges 25% After Sydney Sweeney Jeans Campaign Boosts Earnings and Brand
Key Takeaways
Stock Performance: American Eagle (AEO) stock surged 25% in after-hours trading following better-than-expected Q2 2025 earnings, largely credited to their Sydney Sweeney marketing campaign .
Campaign Impact: The controversial "Sydney Sweeney has great jeans" campaign generated 40 billion impressions and led to sell-out products within days while adding 700,000 new customers .
Cultural Impact: The campaign sparked nationwide controversy and became an unlikely culture war flashpoint, with commentary ranging from accusations of eugenics references to endorsement from former President Trump .
Future Challenges: Despite the success, American Eagle faces significant headwinds including $20 million in Q3 tariff impacts and questions about whether they can sustain this momentum .
The Campaign That Shook Retail
So how did a jeans commercial become the most talked about marketing campaign of the year? American Eagle dropped their Sydney Sweeney campaign in late July, and it was immediately clear this wasn't your typical denim ad. The spot features Sweeney posing in American Eagle jeans with this voiceover: "Genes are passed down from parents to offspring... My body's composition is determined by my genes." Then she turns to the camera and says "My jeans are blue" with this little smirk .
What made this campaign genius (or problematic, depending on your view) was the intentional wordplay between "genes" and "jeans." As someone whose worked in marketing, I can tell you this wasn't accidental - the double meaning was deliberately baked into the concept from day one. The campaign tagline was "Sydney Sweeney has great jeans," which appeared on billboards with "genes" crossed out and replaced with "jeans" .
The execution was brilliant from a pure awareness standpoint. Within days, the campaign generated conversations far beyond fashion circles, becoming a topic on late night TV, political commentary shows, and generating thousands of social media takes. The company reported that Sweeney's signature jeans sold out within a week, with some items selling out within a single day . Their website traffic surged, and the campaign ultimately drove 40 billion impressions - that's a staggering number that most marketers would kill for .
From my perspective having followed retail marketing for years, what made this work was the perfect storm of celebrity relevance, provocative messaging, and execution timing right before back-to-school season. American Eagle's CMO Craig Brommers didn't shy away from the controversy, stating plainly: "'Sydney Sweeney has Great Jeans' is and always was about the jeans. Her jeans. Her story" .
Wall Street Goes Wild
Now lets talk about the financial impact because this is where things get really interesting for investors. American Eagle had been having a pretty rough year before this campaign dropped. Back in May, they'd withdrawn their full-year outlook and announced a $75 million write-off on merchandise that had lost too much value to include in inventory . CEO Jay Schottenstein called it "a challenging period for our business" at the time .
Fast forward to September 3rd, when they dropped their Q2 2025 earnings, and the picture couldn't be more different. Here's how the numbers shook out:
While revenue was still down slightly year-over-year, it crushed analyst expectations by nearly $40 million. Same-store sales declined just 1% compared to the anticipated 2.4% drop. Perhaps most impressively, earnings per share came in at 45 cents, more than double what Wall Street had predicted .
The market reaction was immediate and explosive. AEO stock surged 25% in after-hours trading, one of the biggest single-day moves in the company's history . This wasn't just a short-term pop either - the company re-issued its full-year guidance that it had previously withdrawn, now expecting comparable sales to be approximately flat compared to previous expectations of a 0.2% decline .
What really stood out to me was management's confidence on the earnings call. CEO Schottenstein stated: "The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales" . This from a company that was in pretty rough shape just a few months prior.
The Culture War Element
Alright, let's address the elephant in the room - the campaign somehow got dragged into America's culture wars, and this might have been the unintentional genius of it all. Almost immediately after the campaign launched, some online critics accused American Eagle of promoting eugenics themes through the "genes/jeans" wordplay, noting that Sweeney is blonde-haired and blue-eyed .
Shalini Shankar, an anthropology professor at Northwestern University who studies youth and advertising, told CNN: "It seemed clear to me that they were aligning themselves with a white nationalist, MAGA-friendly identity... I think that this is them trying to rebrand themselves for the present moment, and language is very deliberately used here" .
Then things got really weird when political figures jumped in. Former President Donald Trump posted on Truth Social: "Sydney Sweeney, a registered Republican, has the HOTTEST ad out there. It's for American Eagle, and the jeans are 'flying [off] the shelves.' Go get 'em Sydney." He added: "Being WOKE is for losers, being Republican is what you want to be" .
Meanwhile, Vice President JD Vance mocked liberals on the "Ruthless" podcast, saying: "My political advice to the Democrats is continue to tell everybody who thinks Sydney Sweeney is attractive is a Nazi. That appears to be their actual strategy" . The New York Times found that the controversy escalated once influential right-leaning accounts began amplifying claims of progressive outrage .
Here's where it gets fascinating from a marketing perspective: American Eagle somehow managed to stay above the fray while benefiting from all this attention. They issued a statement saying the campaign "is and always was about the jeans" , but didn't pull back on the messaging at all. In fact, they doubled down, with their CMO stating "'Sydney Sweeney Has Great Jeans' is not going anywhere" .
Travis Kelce's Perfect Timing
Just when everyone was talking about the Sweeney campaign, American Eagle dropped another celebrity partnership that proved perfectly timed. On August 27th, they launched a collaboration with Travis Kelce's Tru Kolors brand . This came just one day after Kelce announced his engagement to Taylor Swift, meaning the timing couldn't have been better from a publicity standpoint .
The Kelce collection performed dramatically better than past collaborations, driving three times more sales in one day than previous partnerships did in an entire week . Items specifically worn by Kelce and his fellow athletes sold out almost immediately .
What's interesting from a branding perspective is how the two campaigns complemented each other. While Sweeney helped revitalize their denim line and brought in female customers, the Kelce partnership strengthened their menswear offerings and capitalized on both sports and celebrity romance buzz. Management noted that the campaigns combined have generated those 40 billion impressions I mentioned earlier .
This one-two celebrity punch demonstrates American Eagle's strategy of targeting Gen Z consumers through relevant influencers. They've previously partnered with tennis player Coco Gauff and actress Jenna Ortega , but none of those collaborations generated nearly the impact of the Sweeney-Kelce combo.
Why This Worked When Other Celebrity Campaigns Fail
In my years watching retail, I've seen countless celebrity partnerships fall flat. So what made this one different? A few key factors that other brands should take note of:
First, the product was actually good. This wasn't just a celebrity putting their name on mediocre merchandise. The Sweeney-branded jeans were specifically designed with her input and included unique details that appealed to her fan base. The Sydney Jacket sold out in one day, and The Sydney Jean - a custom style that donated 100% of proceeds to the Crisis Text Line for mental health support - also sold out within 24 hours .
Second, the campaign was authentic to the celebrity. Sweeney has a reputation for a particular style that aligns with American Eagle's aesthetic. It didn't feel forced like some celebrity endorsements where you can tell they're just collecting a paycheck.
Third, and maybe most importantly, the controversy was organic rather than manufactured. Unlike some brands that try to create edgy campaigns that deliberately provoke, this one stumbled into controversy naturally. The genetic reference seemed like an innocent pun that took on a life of it's own in our hyper-polarized climate.
American Eagle's chief marketing officer Craig Brommers put it perfectly on the earnings call: "The American Eagle Sydney Sweeney campaign was intended to be a brand and business reset, and it was... In just six weeks, the campaign has generated unprecedented new customer acquisition. To be clear, that consumer acquisition is coming from every single county in the U.S. This momentum is national and it is pervasive" .
Risks Ahead: Can AE Keep This Going?
Now for the reality check. As impressive as this turnaround has been, American Eagle still faces significant challenges ahead. The company expects tariff impacts of $20 million in Q3 and $40-50 million in Q4 . These costs are substantial and will likely pressure margins despite the sales boost.
The company has been working to reduce its reliance on China to under 10% this year, but they still have heavy manufacturing presence in Vietnam and India, which have been subject to reciprocal tariffs. Management indicated that price increases will be "ongoing" as one tool to mitigate these tariff impacts .
There's also the question of whether this sales bump is sustainable. Neil Saunders, managing director of GlobalData, noted that while the collaborations have helped, American Eagle faces "a bumpy road" as tariff impacts, higher advertising spend, and increased holiday promotions could dent profit .
The other challenge is competition. American Eagle isn't the only brand leveraging celebrity partnerships right now. Gap has its "Better in Denim" campaign featuring Katseye, Levi's has an ongoing campaign featuring Beyoncé, and Abercrombie has partnered with the NFL . The retail space is getting crowded with celebrity collaborations, which could dilute the impact over time.
Then there's the economic environment. According to a PwC survey cited in one of the articles, U.S. holiday spending is expected to see its steepest drop since the pandemic as shoppers - particularly Gen Z - pull back amid economic uncertainty . This creates a tough backdrop even for companies with successful marketing campaigns.
Where Does American Eagle Go From Here?
So what's next for American Eagle? Management has made it clear they're going to milk this campaign for all it's worth. CMO Craig Brommers stated: "'Sydney Sweeney Has Great Jeans' is not going anywhere. Sydney will be part of our team as we get into the back half of the year... We'll be introducing new elements of the campaign as we continue forward" .
Similarly, the Kelce partnership is "just getting going," with a second drop planned for the NFL season . This suggests we'll see more of both celebrities throughout the back half of 2025.
From an investment perspective, I think the key metrics to watch will be:
- Whether American Eagle can convert these new customers into repeat shoppers
- How they manage the margin pressure from tariffs
- Whether they can maintain this marketing momentum without overspending
The company's success has come despite some earlier merchandising missteps , so there's still work to be done on the product side beyond the celebrity collaborations.
What's fascinating to me as a retail observer is how this campaign succeeded where so many others have failed. In an era where consumers are increasingly skeptical of traditional advertising, American Eagle managed to create something that felt authentic while generating massive awareness. The fact that it became a cultural talking point beyond just fashion circles gave it an amplification no amount of marketing budget could buy.
Frequently Asked Questions
How much did American Eagle's stock actually increase?
The stock surged 25% in after-hours trading following their Q2 2025 earnings report on September 3rd . This was one of the biggest single-day moves in the company's history.
What was controversial about Sydney Sweeney's American Eagle campaign?
The campaign played on the words "genes" and "jeans," with Sweeney stating in the ad: "Genes are passed down from parents to offspring... My body's composition is determined by my genes." Some critics felt this evoked eugenics themes, particularly because Sweeney is blonde-haired and blue-eyed . The campaign became an unlikely culture war flashpoint.
Did the controversy hurt American Eagle's sales?
Surprisingly, no. Despite some initial data showing foot traffic dipped nearly 9% year-over-year in early August , the company reported overwhelming positive results. Sweeney's signature jeans sold out within a week, some items within a day, and the campaign acquired 700,000 new customers .
How long did it take for the Sydney Sweeney jeans to sell out?
All of the Sweeney-branded jeans products sold out within a week, with many selling out within a single day . The Sydney Jacket specifically sold out in one day .
Is American Eagle continuing with the Sydney Sweeney campaign?
Yes, American Eagle has stated they're doubling down on the campaign. Their CMO Craig Brommers said "'Sydney Sweeney Has Great Jeans' is not going anywhere" and that they'll be introducing new elements to the campaign later this year .
What do you guys think about this whole situation? Was this brilliant marketing or just lucky timing? And can American Eagle keep this momentum going? Let me know your thoughts below.