American Eagle Outfitters is betting on promotions and new products to drive sales, leading the company to forecast better-than-expected comparable sales in Q3, FY25. The news caused the apparel retailer's shares to jump 25 per cent after the market closed.
Apparel companies like American Eagle and Abercrombie & Fitch have been able to overcome a retail sector slowdown by using promotions and targeting more affluent consumers.
American Eagle has been trying to boost demand through its marketing campaigns, including the controversial ‘Great Jeans’ denim campaign featuring actress Sydney Sweeney. This follows previous partnerships with tennis player Coco Gauff and actress Jenna Ortega. The apparel maker has also entered into a partnership with NFL player Travis Kelce's clothing brand, Tru Kolors.
The company expects its quarterly comparable sales to increase by a low single-digit percentage. This is a positive forecast, especially since analysts were expecting a 0.3 per cent decline, according to data from LSEG.
American Eagle also expects its annual comparable sales to remain flat compared to the previous year, while analysts had estimated a 1.1 per cent decline.
