American Eagle Outfitters saw its shares surge more than 10% after the market opened after announcing a high-profile partnership with actress Sydney Sweeney to front its Fall 2025 denim campaign.
The company said the campaign, titled “Sydney Sweeney Has Great Jeans,” will feature fresh denim styles tailored for Gen Z, who represent the brand’s most critical consumer base.
The stock opened 10% higher but pared some gains and was trading at 7% at the time of writing.
The marketing blitz, which includes immersive elements like 3D billboards, a lens on Snapchat, AI-powered virtual try-on tech, and a marquee placement on Las Vegas’s Exosphere display at Sphere, marks the company’s most expensive promotional effort to date.
“This is our Super Bowl,” American Eagle CMO Craig Brommers told Marketing Dive, referring to the denim boom that typically comes with the season.
“To be able to partner with Sweeney on this is saying something, and it is saying something in what has been a trickier retail environment this year, that American Eagle is still placing big bets,” he added.
Denim push comes as American Eagle struggles with weakened consumer sentiment
The campaign arrives at a delicate moment for the broader US retail sector, where many brands are grappling with reduced consumer spending.
Apparel, in particular, has seen sluggish demand, and American Eagle is no exception.
In May, the company withdrew its annual guidance, citing tariff-related uncertainty, particularly related to sourcing from China.
This renewed focus on denim and celebrity partnerships is an effort to re-energize demand.
Sweeney, known for her roles in “Euphoria” and “The White Lotus,” commands significant appeal among Gen Z consumers, who are increasingly turning to influencers and stars when making fashion choices.
The campaign includes a limited-edition “Sydney Jean” and a co-designed denim jacket, tapping into the rising popularity of exclusivity and capsule collections in fast fashion.
Industry analysts believe the retailer’s move reflects both an offensive play to regain lost ground and a defensive one to stay relevant in a crowded market.
Wall Street reacts as short interest draws attention
Investor interest also appears to be spiking.
Prior to Thursday’s rally, American Eagle shares had declined about 35% year-to-date, closing Wednesday at $10.82.
The sharp jump sent the stock to around $12.
Analysts noted a high short interest—roughly 12.2% of the company’s float, according to LSEG data—which may have contributed to the swift upward move, particularly as attention around the stock grew on Reddit forums like WallStreetBets.
The social media buzz echoed past episodes, such as Crocs’ 2020 stock surge after a collaboration with singer Justin Bieber.
American Eagle has previously teamed with celebrities like tennis star Coco Gauff and actress Jenna Ortega, but the Sweeney campaign appears to be its most ambitious yet.
Corey Tarlowe, lead analyst at Jefferies, told clients on June 18, after meeting with some of the company’s management, they “expect ongoing headwinds facing the consumer could impact top-line growth and margin performance over the next 6-12 months.”
Tarlowe, who has a hold rating on American Eagle, noted that the company does plan to “reduce costs from its sourcing vendors and diversify its supply chain,” bringing China sourcing to under 10% this year.
Of six brokers tracked by Visible Alpha that follow American Eagle, 4 rate it a hold, one a sell, and just one a buy.
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