Look, we’ve all seen celebrity endorsements go sideways faster than a crypto crash. But sometimes—just sometimes—the stars align (literally) and everyone wins. Case in point: American Eagle Outfitters just posted a 16% stock surge, and we can thank Sydney Sweeney and Travis Kelce for part of the magic.
Here’s what went down: American Eagle (NYSE:AEO) absolutely crushed their Q3 earnings on Wednesday, beating estimates like they were playing whack-a-mole with Wall Street expectations. Revenue hit $1.36 billion (up 6% year-over-year), smashing the $1.32 billion estimate. Earnings per share? A cool 53 cents versus the expected 44 cents. That’s what we call a pleasant surprise.
But here’s where it gets interesting. While the American Eagle brand itself grew a respectable 3%, their Aerie brand—you know, the one that’s been quietly becoming the cool younger sibling—jumped 13%. Comparable store sales for Aerie? Up 11%. Meanwhile, American Eagle’s comp sales managed a modest 1% bump. It’s giving “older sibling watching the younger one steal the spotlight” vibes.
The Celebrity Effect Is Real (And Profitable)
Now, about those celebrity partnerships. The Sydney Sweeney and Travis Kelce collaborations have generated over 44 billion impressions. Yes, billion with a ‘B.’ That’s more eyeballs than the Super Bowl, and apparently, those eyeballs came with wallets attached.
The Sydney Sweeney jeans line? Sold out in two days. TWO DAYS. The company literally couldn’t keep up with demand. CEO Jay Schottenstein admitted they “couldn’t really keep up with that demand” for both the Sweeney and Kelce partnerships. It’s a good problem to have, but still a problem when you’re leaving money on the table.
Black Friday Was Very, Very Good
American Eagle also posted record sales over their Black Friday weekend, which is like saying “we won the lottery” in retail speak. This success prompted them to raise their Q4 guidance significantly. They’re now expecting comparable sales growth of 8-9% for Q4, up from their previous “low single-digits” forecast. That’s not just moving the goalposts—that’s relocating the entire stadium.
The company also boosted their operating income guidance for Q4 to $155-160 million, up from $125-130 million. For the full fiscal year, they’re looking at $303-308 million in adjusted operating income, versus their previous range of $255-265 million.
Wall Street Takes Notice
Analysts are eating this up. UBS raised their price target to $31 per share, Telsey bumped it to $25, and Morgan Stanley went to $23. After Wednesday’s surge, the stock was trading around $24—up 44% year-to-date and sitting at a reasonable 14 times forward earnings.
The lesson here? Sometimes celebrity partnerships actually work. Sometimes a clothing retailer can surprise everyone. And sometimes, just sometimes, Sydney Sweeney can make your portfolio a little happier. We’re not complaining.