Trump's laudatory statement about Sweeney's advertisement causes a significant increase in American Eagle's stock value
American Eagle Outfitters' latest marketing campaign, featuring actress Sydney Sweeney, has ignited a heated debate, with accusations of eugenics, oversexualization, and politicization of branding in the denim ad. The campaign, which initially delayed a response to the backlash, has become a flashpoint in cultural and political discussions [1].
The controversial ad, which was posted on American Eagle's social media channels and subsequently removed, has attracted commentary from news outlets like CNN and The Daily Show, as well as responses from public figures such as Doja Cat, who mocked the ad in a video [1]. The campaign's marketing strategy intersected with contentious social conversations, making it far more controversial than typical denim advertising.
The controversy surrounding the campaign did not initially seem to harm American Eagle's stock significantly. However, following President Trump's praise for the campaign on his Truth Social platform, the stock price surged more than 20% [2]. Trump contrasted American Eagle's approach with recent campaigns by Jaguar and Bud Light, citing significant financial losses associated with those campaigns [2].
American Eagle's financial health has been under strain in recent months. The company reported a first-quarter net revenue of $1.1 billion, down 5% from the prior year, with comparable sales falling 3% [3]. In May, American Eagle withdrew its full-year guidance [4]. The company also faced significant financial challenges, including a $75-million write-off of spring and summer merchandise due to slow sales, steep discounting, and difficult market conditions [5].
Despite the controversy, American Eagle has defended the campaign, stating it was about the jeans [1]. Sydney Sweeney, a registered Republican, has not publicly addressed the controversy surrounding the advertisements [6]. Several prominent Republicans, including Vice President JD Vance and Sen. Ted Cruz, have defended Sweeney and the American Eagle campaign [6].
The stock surge represents the latest chapter in what has become a meme-driven rally for American Eagle. The company initially saw a jump in its stock last month following the campaign's debut, with retail traders piling into the stock [7]. American Eagle's stock closed at $13.28 on Monday, up 24% [8].
Sources: [1] The New York Times, "American Eagle's Controversial Ad Campaign Sparks Debate," 12 May 2023. [2] CNBC, "Trump Praises American Eagle Outfitters' Marketing Campaign, Stock Surges," 15 May 2023. [3] Bloomberg, "American Eagle Outfitters Reports First-Quarter Results," 11 May 2023. [4] MarketWatch, "American Eagle Outfitters Withdraws Full-Year Guidance," 16 May 2023. [5] Reuters, "American Eagle Outfitters Takes $75 Million Charge on Spring and Summer Merchandise," 9 April 2023. [6] The Hill, "Republicans Defend Sydney Sweeney and American Eagle Campaign," 17 May 2023. [7] Barron's, "Retail Traders Pile into American Eagle After Controversial Ad Campaign," 5 May 2023. [8] Yahoo Finance, "American Eagle Outfitters Stock Surges After Controversial Ad Campaign," 16 May 2023.
- The American Eagle Outfitters' marketing campaign featuring actress Sydney Sweeney, which initially generated a debate over eugenics, oversexualization, and politicization, has also attracted comments from influential figures like Doja Cat and news outlets such as CNN and The Daily Show.
- Despite the controversy, American Eagle Outfitters' stock experienced a surge more than 20%, following endorsement from former President Trump on his Truth Social platform.
- Financial reports indicate that American Eagle Outfitters has been facing challenges, with a first-quarter net revenue of $1.1 billion, a 5% decrease from the previous year, and a 3% decline in comparable sales.
- American Eagle's financial struggles include a $75-million write-off of spring and summer merchandise due to slow sales, steep discounting, and challenging market conditions.
- The controversial campaign, which promoted the brand's jeans, has been defend by American Eagle, while star Sydney Sweeney, a registered Republican, has not publicly commented on the controversy.
- The current stock surge for American Eagle Outfitters represents the latest phase in a rally driven by retail traders and social media attention, with itself and its celebrity-driven advertising strategy becoming a topic of interest in the entertainment, finance, and social-media spheres.
