(Reuters) -American Eagle Outfitters forecast third-quarter comparable sales above expectations on Wednesday, betting on a demand boost from Sydney Sweeney campaign and the launch of new products, sending its shares up 25% after the bell.
The company hailed the controversial “Great Jeans” campaign with actress Sydney Sweeney, which included a fall denim collection, as a success.
“The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales,” it said in a statement.
The company has tied-up with National Football League player Travis Kelce’s clothing brand Tru Kolors for a limited edition apparel lineup, creating buzz among shoppers as the news followed Kelce’s engagement to pop star Taylor Swift.
It has also entered into partnerships with tennis player Coco Gauff and actress Jenna Ortega.
The advertisement campaigns and a focus on more affluent consumers have helped apparel firms such as American Eagle and Abercrombie & Fitch to defy a slowdown in the retail sector.
The company expects quarterly comparable sales to rise in the low single digits, compared with expectations of a 0.3% decline, according to data compiled by LSEG.
It also expects annual comparable sales to be flat compared to a year ago, while analysts estimated a decline of 1.1%.
The company had pulled its annual forecasts in May due to macroeconomic uncertainty.
For the quarter ended August 2, American Eagle posted a revenue of $1.28 billion, beating expectation of $1.24 billion. Comparable sales fell 1%, compared to an expected 2.4% decline.
Quarterly adjusted profit of 45 cents per share, beat analysts’ estimates of 21 cents.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Alan Barona and Arun Koyyur)
Comments