US Stock Market Move | The celebrity effect helped boost American Eagle Outfitters (AEO.US) stock by 24% after hours, but profit guidance was lowered due to tariff pressures.

American Eagle Outfitters (AEO.US) rose 24.52% after hours on Wednesday, reaching $16.96. In terms of news, American Eagle Outfitters announced its second-quarter performance for 2025 on Wednesday, with several indicators far exceeding market expectations: earnings per share reached $0.45, a significant increase from the expected $0.20; revenue was $1.28 billion, higher than the expected $1.23 billion. The company also announced the re-release of the previously withdrawn annual performance guidance, expecting comparable sales to remain basically flat, better than the analysts' expected 0.2% decrease. However, the forecast for annual operating income was lowered from the original $360 million to $375 million to $255 million to $265 million, mainly due to the impact of tariff coststhe company expects a loss of $20 million in the third quarter, which will increase to $40-50 million in the fourth quarter. This quarter's performance boost was due to collaborations with Sydney Sweeney and Travis Kelce. The controversial "Great Jeans" advertising campaign with "Euphoria" star Sweeney became the "best marketing case so far": the campaign led to a sell-out of jeans, with Sydney jackets and custom jeans selling out in a single day, and all related proceeds were donated to mental health organizations; traffic saw double-digit growth, and brand awareness and engagement significantly increased. The Tru Kolors collaboration with Kelce was launched the day after his engagement with Taylor Swift, with single-day sales three times higher than previous collaboration series, and multiple products quickly sold out. Prior to this, the company had continued to deepen its consumer base among Generation Z through collaborations with tennis player Coco Gauff and actress Jenna Ortegathis strategy is based on a PwC survey showing that economic uncertainty is leading to the largest drop in U.S. holiday spending since the pandemic, especially among Generation Z shoppers, prompting the company to accurately target young consumers. American Eagle Outfitters expects comparable sales to grow by approximately 10% in the third quarter, higher than analysts' expectations of 0.9%, and the fourth quarter will maintain the same growth trend, with a strong start to the fall season. However, the company also faces multiple challenges. eMarketer analyst Sky Kanavis pointed out that the impact of tariffs, increased advertising spending, and a surge in holiday promotions may weaken profits, but currently these marketing activities have driven sales growth, enough to offset some losses. In addition, marketing mishaps, more cautious consumer choices, tariff pressure, and intensified competition in the industryAbercrombie & Fitch's "Better in Denim" ad, Levi's collaboration with Beyonc, and Gap's focus on sports marketing and partnership with the NFLare all putting pressure on American Eagle Outfitters. Furthermore, the company is reducing its reliance on Chinese manufacturing to below 10%, but factories in Vietnam and India are still affected by reciprocal tariffs. Despite the controversy surrounding some of these activities, such as left-wing critics questioning the double entendres in the "Great Jeans" slogan related to eugenics, and right-wing supporters praising it as the "hottest ad," the company emphasizes that the campaign has attracted 700,000 new customers and that omnichannel traffic continued to increase positively in August, successfully offsetting some market pressure. Analysts believe that while celebrity collaborations may increase advertising spending, the current sales growth is enough to compensate for profit losses, and it is important to continue monitoring the impact of tariffs and the effectiveness of strategies in the future.