American Eagle touts success of ad campaign: Sydney Sweeney is a ‘winner’
American Eagle Outfitters Inc. reported better-than-expected second quarter earnings and sales as it touted the success of its controversial “great jeans” marketing campaign, which it said drove traffic and “unprecedented” new customer acquisition.
The campaign featured actor Sydney Sweeney, who called out her great jeans and great genes, with the latter reference being criticized by some as a nod to eugenics. Some data in August suggested the campaign, which launched the week before the end of the retailer’s second quarter, suggested the immediate sales impact of the campaign was minimal at best.
But American Eagle executives on the company’s doubled down on the campaign and said its impact will be felt through the rest of the year
“Sydney Sweeney sells great jeans,” chief marketing officer Craig Brommers told analysts. “She is a winner.”
Brommers said that the “Sydney Sweeney Has Great Jeans campaign” 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,” he said.
Brommers said the campaign, in just six weeks, has generated “unprecedented” new customer acquisition across the U.S. Since the launch, the brand has seen its customer base expand by 700,000. The ads also have racked up more than 150 million social media views.
“We are off to a start beyond our wildest dreams,” Brommers said. “As we track consumer sentiment over the past six weeks, we’ve seen consideration and purchase intent meaningfully up. And now it’s our opportunity to continue to convert this buzz into business and to convert these new customers into repeat customers.“
American Eagle CEO Jay Schottenstein also stood by the campaign.
“The fall season is off to a good start, fueled by the strength of our product lines and the success of our recent marketing campaigns,” he said in the earnings statement. “The iconic fall denim campaign with Sydney Sweeney affirms we are the American jeans brand. We saw a record-breaking new customer acquisition and brand awareness cutting across age demographics and genders.”
American Eagle’s recent limited-time collaboration with NFL star — and Taylor Swift's fiancé — Travis Kelce and his Tru Colors clothing line has kept the momentum going, Schottenstein told analysts. The launch, which occurred the day after the engagement was announced, drove three-times more sales in one day than past collaborations did in a week. The Sweeney and Kelce campaigns combined have 40 billion impressions.
“We have seen periods of very strong demand from both campaigns, fueling positive traffic in August, which was up consistently throughout the month,” Schottenstein said.
Second Quarter
Net income totaled $77.6 million, or $0.45 per share, for the quarter ended Aug. 2, compared with $77.3 million, or $0.39 per share, in the year-ago period. Analysts had expected adjusted earnings per share of $0.21.
Sales fell 1% to $1.28 billion, topping estimates of $1.24 billion. Same-store sales decreased 1%. By division, comparable sales fell 3.1% at American Eagle and rose 3% at Aerie.
For the current and fourth quarters, American Eagle expects comparable sales to be up in the low single digit range, higher than analysts had expected. For the full year, American Eagle said expects “approximately flat” same-store sales.
The company expects lower operating income due to tariffs, which are expected to cost it around $20 million in the third quarter, and $40 million to $50 million in the fourth quarter.
