'Sydney Sweeney...Is Not Going Anywhere': American Eagle To Double Down On Celeb Power As Stock Rockets 24% On Q2 Sales Beat

American Eagle stock surged more than 24% in after-hours trading on Wednesday after the retailer beat Wall Street's second-quarter sales estimates and reaffirmed plans to lean on celebrity partnerships that have lifted its brand this fall, while acknowledging the hit from Trump-era tariffs.

The company reported net sales of $1.28 billion for the three months ended July 31, while analysts expected the company to post $1.23 billion in sales, according to Fiscal data.

American Eagle experienced a resurgence in July following the launch of a new jeans campaign featuring Euphoria star Sydney Sweeney, which significantly boosted brand awareness.“Sweeney Signature jeans sold out within a week, and some products within 1 day,” President & Executive Creative Director Jennifer Foyle said.

“Since the launch, customer counts are up more than 700,000, and the campaigns combined have generated a staggering 40 billion impressions,” Foyle added on a post-earnings conference call.

The company gained a new customer in“every single county in the U.S.”, according to Chief Marketing Officer Craig Brommers, in the six weeks of the campaign.

Retail sentiment on Stocktwits about American Eagle was in the 'extremely bullish' territory at the time of writing, while retail chatter was 'extremely high.'

“God bless Sydney Sweeney,” one user wrote, with expectations of a share price jump to $18 on Thursday.

“If they continue this, it seems that it can only drive sales more,” another user wrote.

Last month, the company also launched a limited-edition brand collaboration known as AE x Tru Kolors, which is Travis Kelce's sportswear and lifestyle clothing line. The launch came on the heels of the football star's engagement with Taylor Swift.

The company also forecasted third-quarter comparable sales growth of a low single-digit percentage, compared with analysts' estimates of a 0.3% decline, according to LSEG data.

American Eagle warned that tariffs will weigh more heavily on its results in the second half of the year, despite its efforts to mitigate the impact. The company now expects a tariff impact of about $20 million in the third quarter and $40 million to $50 million in the fourth quarter, which will pressure gross margins.

Executives noted that early efforts have been effective, reducing the unmitigated tariff burden from around $180 million to about $70 million. These steps included rebalancing sourcing countries, negotiating with vendors, shifting freight costs between air and ocean, and limited pricing actions.

Still, the retailer cut its full-year operating income forecast to $255 million-$265 million, down from $360 million-$375 million previously. American Eagle said it is working to reduce its reliance on China to below 10% of sourcing this year. However, it remains vulnerable to tariffs due to its significant manufacturing presence in Vietnam and India.

“Additionally, 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, and we'll be introducing new elements of the campaign as we continue forward,” Bommers said.

American Eagle stock has fallen 19.2% this year.

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