American Eagle shares up 13% after record 3Q revenue, boosted by Sweeney ads

Shares of jeans retailer American Eagle Outfitters jumped more than 13% in early trading this morning, December 3, after the company posted record quarterly revenue. The rally was supported in part by a marketing campaign featuring actress Sydney Sweeney, which U.S. President Trump called “the hottest ad ever.” Against this backdrop, American Eagle has now raised its fiscal-year outlook ahead of the holiday season.

Shares of American Eagle have added more than 13% to $23.60 apiece in morning trading today as of this writing. For Tuesday’s main session, they closed down 2% at $20.80 per share. The stock is trading at its highest level since October 2024.

High-profile marketing campaigns with Sweeney, as well as professional football player Travis Kelce, who is engaged to Taylor Swift, have helped the retailer improve sales and increase its market value by more than 20% this year, Barron’s writes.

American Eagle’s net revenue rose 6% year over year to a record $1.36 billion in its fiscal third quarter (ended November 1). Wall Street had expected $1.32 billion, or 2.5% growth, according to Barron’s. This was driven by a 4% rise in overall same-store sales. Aerie comparable sales grew 11%, and those of American Eagle 1%, the company said. Earnings per share for the quarter were $0.53 versus analysts’ expectations of $0.43.

Margins were a relative weak spot in the report, Barron’s wrote. The gross margin fell 0.4 percentage points year over year to 40.5% due to higher tariffs and increased marketing costs.

The record third quarter allowed American Eagle to raise its outlook for the full fiscal year 2025, which runs through January 30. The company now expects comparable sales to grow in the low single digits, versus a prior forecast for flat performance. Operating income is now projected at $303-308 million, versus the previous guided range of $255-265 million.

“We delivered a record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels... We are focused on finishing the season strong and sustaining our success into 2026 and beyond,” CEO Jay Schottenstein said.

American Eagle shares have risen almost 25% year to date. Most of those gains came after the previous quarterly report, which showed that the celebrity-driven marketing campaigns were gaining traction, Barron’s writes. Before the current rally, American Eagle’s shares had been under pressure, falling 20% from the start of the year as investors questioned how the company would manage the impact of tariffs and softer consumer spending on clothing and footwear.

To shift sentiment, American Eagle launched its campaign with Sweeney in July. The stock surged both on the day of the launch and again after Trump praised the ad. Still, some critics argued that the slogan “Sydney Sweeney has great jeans” echoed themes of racial superiority and beauty standards because of the play on “jeans” and “genes.”

Still, the partnerships have garnered more than 44 billion impressions, Barron’s writes. And a new holiday campaign featuring television host Martha Stewart is expected to maintain momentum.

Wall Street remains cautious on the stock, MarketWatch data shows. Eight analysts rate American Eagle "hold," and three "sell," versus only one "buy." The consensus target price is $19.22 per share, below current quotes.