The Sydney Sweeney advert marketing campaign acquired a thumbs-up from President Trump, whereas the corporate additionally introduced a brand new collaboration with Travis Kelce.
Shares of American Eagle Outfitters (AEO 0.11%) rallied 19.8% in August, in accordance with information from S&P International Market Intelligence.
American Eagle capitalized on July’s optimism relating to its new advert marketing campaign starring actress Sydney Sweeney when President Trump endorsed the corporate’s marketing campaign in early August. Then later within the month, American Eagle introduced a collaboration with Kansas Metropolis Chiefs tight finish and Taylor Swift fiancée Travis Kelce.
American Eagle’s funding in superstar pays off
American Eagle’s inventory acquired a bump in late July when it launched a controversial advert with actress Sydney Sweeney with the byline, “Sydney Sweeney has Nice Genes Denims.” Whereas the inventory then pale after an preliminary elevate, President Trump weighed in in early August, writing on his social media platform Reality Social that the advert was, “the HOTTEST on the market…the denims are flying off the cabinets.”
In response, traders bid up the inventory, considering the controversy would possibly increase publicity for the model and due to this fact subsequent gross sales.
Then later within the month, American Eagle introduced a restricted addition collaboration with Travis Kelce’s “Tru Colours” clothes line, which Kelce started in 2019. The brand new restricted version assortment is to be unveiled in two “drops,” with one on Aug. 27, and one other upcoming on Sept. 24. As luck would have it, the collaboration announcement got here someday after Kelce introduced his engagement to music star Taylor Swift.
So, American Eagle nabbed a advertising and marketing coup in each late July and into August, grabbing help from the President, in addition to arguably two of the most important celebrities in sports activities and leisure.
Picture supply: Getty Photos.
What’s going to it imply for the inventory, although?
The high-profile advertising and marketing push — each deliberate and unplanned – appeared to spice up American Eagle’s near-term outlook. On Sept. 3, the corporate reported its second-quarter earnings outcomes for the quarter ending Aug. 2, beating analyst expectations despite the fact that gross sales and comparable-store gross sales have been every down 1%.
Nonetheless, administration mentioned it was seeing “an uptick in buyer consciousness, engagement and comparable gross sales,” on account of the Sweeney and Kelce campaigns, and projected comps to return to optimistic low single digits in each Q3 and This fall. That enchancment would seem to validate the influence of the Sweeney and Kelce campaigns.
That mentioned, regardless of a near-20% achieve in August and a 20%-plus achieve in September to date, American Eagle’s inventory is just up about 12.8% on the yr and remains to be truly 2.3% beneath the place it was one yr in the past. A cautious client, excessive rates of interest, and the Trump administration’s tariffs have all acted as headwinds to the clothes retailer, because it has to many retailers.
Billy Duberstein and/or his shoppers don’t have any place in any of the shares talked about. The Motley Idiot recommends American Eagle Outfitters. The Motley Idiot has a disclosure coverage.
