The controversy around Sydney Sweeney, her jeans—or genes—and the American Eagle ad campaign that launched a thousand think pieces and merited a mention from U.S. President Donald Trump doesn’t seem to have hurt the retailer’s business.
Jay Schottenstein, executive chairman of the board and chief executive officer of American Eagle Outfitters Inc., stood by the campaign, which some saw as a nod to eugenics as it played off the idea of Sweeney having both great jeans and great genes.
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Schottenstein instead saw the pieces of a plan to revamp the retailer clicking into place.
“The fall season is off to a positive start,” the CEO said in a statement with the company’s second-quarter financial results. “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. We look forward to building on our progress and the continued strength of our iconic brands to drive higher profitability, long-term growth and shareholder value.”
AEO’s revenues fell 1 percent to $1.28 billion for the quarter ended Aug. 2, which was considerably better than the 4.3 percent decline analysts had penciled in, according to Yahoo Finance.
That only captures a part of the impact of the Sweeney campaign, which was launched on July 23, just over a week before the quarter ended.
As the campaign was whipped up into a firestorm animating the nation’s culture war and general political divisiveness, American Eagle said the ads were “always about the jeans.”
Along the way, the brand is said to have seen denim sellouts, double-digit traffic growth, new customer growth and increased awareness and engagement.
But as a business, it still has some rebuilding to do.
Comparable sales slid 1 percent, with a 3 percent decline at American Eagle partially offset by a 3 percent increase at the Aerie business.
AEO’s second-quarter net income inched up to $77.6 million from $77.3 million a year earlier while operating income tallied $103 million.
Earnings per share totaled 45 cents—well ahead of the 20 cents analysts forecast. AEO has been busy investing in itself and so far this year has spent $231 million to buy back 20 million shares, or about 10 percent of those outstanding.
AEO ended the quarter with inventory valued at $718 million, an increase of 8 percent that was driven by higher tariffs. Inventory on a unit basis rose 3 percent.
