American Eagle Outfitters (AEO) has reported positive third-quarter fiscal 2025 results, with its namesake brand, American Eagle, achieving sales growth after a period of decline. While American Eagle's celebrity-led marketing campaigns, featuring stars like Sydney Sweeney and Travis Kelce, are credited with this turnaround, its sister brand Aerie delivered significantly stronger performance during the same period.
For the quarter ending November 1, AEO's intimates line, Aerie, saw comparable sales surge by 11%, bolstered by popular offerings such as its Offline athleisure collection. In contrast, American Eagle's sales increased by a more modest 1%, according to the company's earnings statement. This 1% growth for American Eagle marks a reversal from the prior quarter, when sales were down 3%. Analysts, however, have questioned why growth has been slower for American Eagle despite its recent series of expensive, high-profile advertising campaigns compared to Aerie.
Jennifer Foyle, President and Executive Creative Director for both American Eagle and Aerie, addressed these concerns, emphasizing the importance of impactful marketing for the brand's future. "Look, this is important for our future. We need to remain strong and competitive, and we need to amplify our product," Foyle stated in response to an analyst's question regarding the marketing gap between the two brands. She further explained that effective marketing creates a larger "halo effect" for the business. CEO Jay Schottenstein added that American Eagle has attracted over 1 million new loyalty members in recent months, with jeans featured in a Sydney Sweeney campaign selling out within days.
American Eagle's revamped marketing strategy, which centers on collaborations with celebrities such as Sweeney, Travis Kelce, and Martha Stewart, has been a source of pride for executives. The brand is actively working to strengthen its position in menswear and the highly competitive denim category, while also boosting its cultural relevance amidst fierce competition from rivals like Gap.
The brand's menswear lineup showed improvement in Q3, partly due to a partnership with NFL star Travis Kelce's True Kolors brand, launched during the busy back-to-school shopping season. Performance in womenswear was more uneven; denim proved to be a bright spot, but non-denim bottoms, shirts, and dresses lagged. "In women’s, although we had a very good back-to-school season, the quarter in total was not as strong," Foyle noted during the earnings call. She attributed some of this to "robust demand early in the period [that] led to a number of out of stocks in some of our best-selling items."
American Eagle's campaign with "Euphoria" actor Sydney Sweeney represented its largest marketing effort to date. The campaign garnered national attention and some controversy for messaging that critics interpreted as equating good genetics with good jeans, drawing comparisons to the long-disproven theory of eugenics. Executives have defended the campaign, asserting that the creative was always focused on denim and is part of a broader brand reset. Despite the controversy and some product shortages in Q3 attributed to the Sweeney promotion, denim sales were robust around Black Friday.
Collectively, the Kelce and Sweeney campaigns have generated over 44 billion impressions and continued to attract new customers in Q3, showing significant benefits across digital channels. American Eagle's collaboration with Martha Stewart, which debuted in late November, is currently a key component of its holiday strategy. "Total customer counts are up across brands and customer loyalty grew 4% in the quarter," Foyle confirmed. "AE is clearly building long-term awareness and desirability and has captured the attention of both new and existing customers."
Overall, American Eagle's parent company delivered record Q3 revenue, climbing 6% to $1.4 billion, and subsequently raised its Q4 outlook. The upcoming holiday period will serve as a crucial test for whether American Eagle's bold marketing investments are building sustainable long-term momentum and effectively engaging shoppers who are expected to reduce discretionary spending. Foyle expressed optimism, stating, "Although it’s still early days of our renewed marketing strategy, we know that having the right talent amplifies our brand and product at key moments. We are very encouraged by our progress and expect to continue fueling brand excitement into 2026 and beyond."
