Shares of American Eagle Outfitters have skyrocketed, soaring a remarkable 25% in after-hours trading following the company's announcement of its lucrative celebrity partnerships with Sydney Sweeney and Travis Kelce.

This surge comes just as CEO Jay Schottenstein revealed that the fashion retailer's second-quarter performance has "exceeded expectations," pointing to the powerful influence of its viral advertising campaigns.

Despite a slight sales slip of 1% between May and July and a previous 5% decline, American Eagle's executives are optimistic. They predict modest sales growth in the coming months, thanks in part to a boost in customer interest driven by the brand's fresh marketing initiatives.

The autumn season is off to an encouraging start, Schottenstein stated, emphasizing the heightened customer awareness and engagement resulting from their star-studded ad campaigns.

Spotlight on Controversial Ads

One notable piece of advertising is the 'Great Jeans' campaign featuring the Emmy-nominated actress from Euphoria, Sydney Sweeney. In the ad, she provocatively states, "Genes are passed down from parents to offspring, often determining traits like hair color, personality, and even eye color. My jeans are blue." This has sparked both intrigue and criticism.

While many were captivated, others were offended, interpreting the ad as a thinly veiled reference to eugenics—a discredited theory surrounding selective breeding. American Eagle, however, stands firm in its defense, clarifying that the focus was solely intended to be on their denim jeans.

Celebrity Influence and Future Collaborations

The fallout from the controversial campaign reached the White House, where former President Donald Trump expressed his support for Sweeney on Truth Social, stating, "Sydney Sweeney, a registered Republican, has the HOTTEST ad out there. Go get 'em, Sydney!"

Adding to the excitement, American Eagle confirmed that more collaborations with Sweeney and Kelce are on the horizon, hinting at future campaigns that could keep the momentum alive.

However, the company did issue a cautionary note: analysts should brace for an additional $70 million cost due to tariffs in the latter half of the financial year, although this figure has been significantly reduced through new supplier negotiations.

While they plan to increase some prices, the team insists this isn't the main strategy behind mitigating tariff impacts.

Conclusion: A Fashion Retailer on the Rise

With strong celebrity endorsements and a bold, albeit controversial advertising approach, American Eagle is poised to reclaim its footing in the competitive retail landscape. Fans and fashionistas alike will be watching closely to see how this bold strategy unfolds!