American Eagle Outfitters shares surged over 10% at the market open following the announcement of a high-profile collaboration with actress Sydney Sweeney to lead its autumn 2025 denim campaign.
The campaign, titled “Sydney Sweeney Has Great Jeans,” will introduce new denim styles specifically crafted for Gen Z, a crucial consumer demographic for the brand.
While the stock initially jumped 10%, it pared some gains and was trading 7% higher at the time of this report.
This marketing blitz is the company’s most extensive promotional effort to date. It features immersive elements like 3D billboards, a Snapchat lens, AI-powered virtual try-on technology, and a prominent placement at the Las Vegas Sphere.
“This is our Super Bowl,” American Eagle’s Chief Marketing Officer, Craig Brommers, told Marketing Dive, emphasizing the typical seasonal boost for denim. “To be able to tie in Sweeney with this is to say something, and that is, in a more complicated retail environment, American Eagle is still making big bets.”
A High-Stakes Denim Push Amidst Consumer Weakness
The campaign launch comes at a challenging moment for the broader U.S. retail sector, with many brands grappling with reduced consumer spending. Apparel, in particular, has seen sluggish demand, and American Eagle is no exception.
In May, the company revised its annual forecast downward, citing uncertainties related to tariffs and supply chain issues, especially concerning China. This strategic pivot toward celebrity endorsements and denim is an overt effort to reignite demand.
Sweeney, recognized for her roles in “Euphoria” and “The White Lotus,” holds considerable sway with Gen Z consumers. This demographic increasingly relies on influencers and stars for fashion guidance.
The collection includes a limited-edition “Jean Sydney” and a coded pair of jeans, capitalizing on the growing appetite for exclusivity and capsule collections in fast fashion.
Industry analysts view this retail strategy as both an aggressive move to regain lost market share and a defensive play to maintain relevance in a crowded marketplace.
Investor Interest Peaks as Short Interest Gains Attention
Investor enthusiasm also appears to be on the rise. Prior to Thursday’s rally, American Eagle shares had declined approximately 35% year-to-date, closing Wednesday at $10.82.
The significant surge pushed the stock to around $12.
Analysts noted a substantial short interest, around 12.2% of the company’s float, according to LSE data. This could have fueled the rapid ascent, especially as the stock gained traction on online forums like Wallstreetbets.
The social media buzz echoes past events, such as the surge in Crocs stock in 2020 following a collaboration with Justin Bieber.
While American Eagle has previously partnered with figures like tennis star Coco Gauff and actress Jenna Ortega, the Sweeney campaign appears to be its most ambitious venture yet.
Corey Tarlowe, a managing director at Jefferies, informed clients on June 18, after meetings with company management, that they “expect headwinds against the consumer to pressure revenue growth and margin performance over the next six to 12 months.”
Tarlowe, who maintains a “hold” rating on American Eagle, indicated the company’s plans to “reduce its supply chain costs and diversify its supply chain,” aiming to reduce reliance on China to under 10% this year.
Among six analysts tracked by Visible Alpha covering American Eagle, four recommend “hold,” one suggests “sell,” and only one advises “buy.”
