American Eagle stock soars 20% as retailer says Sydney Sweeney campaign is 'best' to date, beats earnings

"American Eagle said Wednesday its partnership with Sydney Sweeney has been its "best" advertising campaign to date as it announced fiscal second-quarter earnings that beat expectations. The company's splashy, yet controversial, campaign with the "Euphoria" star led to some criticism and blowback but the launch, coupled with a recent partnership with Taylor Swift's new fiance Travis Kelce, has led to new customer acquisition and positive traffic across channels."

"It now expects comparable sales to be approximately flat, better than the 0.2% decline analysts had anticipated, according to StreetAccount. It still expects gross margin to be down for the duration of the year, but it made key changes to its outlook for operating income, which is bearing the brunt of the tariff impact. The company is now expecting its full-year operating income to be between $255 million and $265 million, down from a previous range of between $360 million and $375 million."

American Eagle reported fiscal second-quarter earnings that beat expectations, with EPS of 45 cents versus 21 cents expected and revenue of $1.28 billion versus $1.24 billion expected. Marketing partnerships with Sydney Sweeney and Travis Kelce drove new customer acquisition and increased traffic across channels despite some criticism, and after-hours trading jumped more than 20%. Comparable sales are now projected to be approximately flat versus an anticipated 0.2% decline. Gross margin is expected to remain down for the year. Full-year operating income guidance was lowered to $255–$265 million from a prior $360–$375 million range due to tariff impacts.

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