Dec 2 (Reuters) - American Eagle Outfitters AEO.N raised its annual comparable sales forecast on Tuesday, betting on marketing-driven demand for its apparel and accessories during the holiday season, sending its shares up about 11% after the bell.
Successful marketing campaigns, along with its focus on high-earning consumers, have helped the company fight inflation and a trade policy-driven broader retail slowdown that has impacted discretionary spending among budget-conscious consumers.
American Eagle's "Great Jeans" denim campaign with actress Sydney Sweeney, a tie-up with NFL player Travis Kelce's clothing brand Tru Kolors, and partnerships with tennis player Coco Gauff and actress Jenna Ortega, helped the company boost demand going into the crucial holiday period.
American Eagle now sees annual comparable sales rising in the low single digits, compared to its previous expectations of about flat growth.
The company also expects current-quarter comparable sales to grow between 8% and 9%, compared with analysts' estimates of a 2.2% rise, according to data compiled by LSEG.
Third-quarter comparable sales gained 4%, compared with analysts' estimates of a 2.4% rise. Adjusted profit per share of 53 cents beat estimates of 44 cents.
Its Aerie segment comparable sales jumped 11%, while the bigger American Eagle brand's comparable sales edged 1% higher. They increased 5% and 3%, respectively, in the same quarter last year.
"The results speak clearly to a tale of two brands," eMarketer analyst Sky Canaves said, striking a note of caution on underlying brand dynamics despite the overall bullish guidance.
"Aerie is fully driving the momentum with its affordable mix of loungewear, intimates, and active wear that appeals to value and style-driven young shoppers, but the namesake brand appears to be treading water despite aggressive spending on marketing campaigns."
The company expects a $50 million tariff hit in the fourth quarter, compared to previous expectations of between $40 million and $50 million. For fiscal 2025, it sees a tariff impact of about $70 million.