AEO Q2 earnings: Sydney Sweeney & Travis Kelce campaigns boost performance

American Eagle Outfitters (AEO) reported second-quarter net revenue of 1.28 billion dollars, down 1 percent year-over-year, with total comparable sales also declining by 1 percent. Despite the dip, the retailer posted its second-highest second-quarter revenue on record. Following the earnings release, shares rose nearly 1 percent in after-hours trading, signalling investor confidence in AEO’s strategy of leaning on high-impact celebrity collaborations.

Executives credited much of the brand’s recent strength to its headline-making partnerships. Chief among them, the Sydney Sweeney campaign, which Aerie and American Eagle President Jen Foyle called a “brand and business reset.” The campaign drove “unprecedented new customer acquisition” nationwide, triggered denim sellouts, and generated an extraordinary 40 billion impressions.

Celebrity collaborations drive AEO sales

Launched in late July with the cheeky tagline “Sydney has great jeans,” the campaign quickly transcended fashion, becoming a cultural talking point across TikTok, late-night television, and even the political arena—when former President Donald Trump publicly called the ad “fantastic.” Executives emphasised that beyond virality, the campaign translated directly into sales across denim, tops, and accessories.

Building on this momentum, AEO unveiled its collaboration with Kansas City Chiefs star Travis Kelce just before Labor Day. The timing, just days after Kelce’s high-profile engagement to Taylor Swift, gave the launch a cultural tailwind. The result: a surge in men’s business, with executives reporting the line dominated sales over the holiday weekend.

CMO Craig Braumers highlighted how the Kelce partnership complements the Sweeney campaign, noting that both collaborations are “helping us regain market share by reaching new audiences and reinforcing our relevance.” Both stars will continue to anchor AEO’s marketing throughout the fall with fresh product drops designed to convert new fans into loyal customers.

Financial performance and outlook

While Aerie posted 3 percent comparable sales growth, American Eagle brand comps slipped 3 percent. Even so, AEO’s gross profit climbed to 500 million dollars, with margins improving by 30 basis points to 38.9 percent, thanks to lower markdowns. Operating profit increased 2 percent to 103 million dollars, and diluted earnings per share rose 15 percent to 45 cents.

Looking ahead, AEO forecasts low single-digit comparable sales growth for the third quarter, outperforming analyst expectations of a slight decline. Tariffs remain a headwind, with an estimated 20 million dollar impact in Q3 and up to 50 million dollars in Q4, prompting AEO to lower its full-year operating income forecast. Still, executives stressed that sourcing shifts and vendor negotiations have reduced the company’s unmitigated tariff burden significantly.

Executives made clear that celebrity-driven marketing will remain central to AEO’s strategy. “Sydney Sweeney isn’t going anywhere—she’s part of our team as we head into the back half of the year,” Braumers said, hinting at new phases of the campaign to come. Meanwhile, the Travis Kelce collection is expected to expand through additional launches.