Dec 2 (Reuters) – American Eagle Outfitters raised its annual comparable sales forecast on Tuesday, betting on marketing-driven demand for its apparel and accessories during the holiday season, sending the company’s shares up about 10% after the bell. Marketing campaigns and newer collections of clothing, along with a focus on high-earning consumers, have helped the […]
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American Eagle lifts sales forecast on holiday demand, marketing campaigns
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Dec 2 (Reuters) – American Eagle Outfitters raised its annual comparable sales forecast on Tuesday, betting on marketing-driven demand for its apparel and accessories during the holiday season, sending the company’s shares up about 10% after the bell.
Marketing campaigns and newer collections of clothing, along with a focus on high-earning consumers, have helped the company offset losses from the broader retail slowdown and budget-conscious consumers pulling back on discretionary spending amid inflationary prices and trade-policy-driven uncertainty.
The company has been trying to boost demand through its marketing initiatives, including the “Great Jeans” denim campaign with actress Sydney Sweeney, a tie-up with NFL player Travis Kelce’s clothing brand Tru Kolors, and partnerships with tennis player Coco Gauff and actress Jenna Ortega.
The campaign with Sweeney, which is the company’s most expensive campaign to date, has helped boost sales, especially among Gen Z shoppers. The company also aims to expand the existing collaborations and look for more celebrity partnerships to carry on the momentum on sales.
American Eagle now sees annual comparable sales rising in the low single digits, compared to its previous expectations of about flat growth.
The company sees current-quarter comparable sales rising between 8% and 9%, compared with analysts’ estimates of a 2.2% rise.
Third-quarter comparable sales rose 4%, compared with analysts’ estimates of a 2.4% rise, according to data compiled by LSEG.
The company posted net revenue of $1.36 billion for the quarter, compared with analysts’ estimates of $1.32 billion. Adjusted profit per share of 53 cents also beat estimates of 44 cents.
It expects a $50 million hit from tariff costs in the fourth quarter, compared with its previous expectations of between $40 million and $50 million. For fiscal 2025, it sees a tariff impact of about $70 million.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Maju Samuel)