"American Eagle Caught in the Crossfire of the Culture Wars"

American Eagle jeans model Sydney Sweeney has sparked a culture war with her endorsement ad, with critics accusing the ad of being racist and conservatives defending her. Bloomberg Businessweek national correspondent Joshua Green notes that the controversy highlights the stakes for companies in navigating conservative corporate culture.

American Eagle Outfitters (AEO) has found itself at the center of a cultural storm following the release of an ad campaign featuring actress Sydney Sweeney. The ad, which has since been removed from American Eagle's social media channels, sparked controversy due to its alleged promotion of eugenics and sexualization of women. The backlash has had significant implications for the company's stock performance and broader implications for corporate culture.

The ad campaign, which launched on July 23, features Sweeney reciting a monologue about genetics and the traits they determine, including personality and eye color. The ad's slogan, "Sydney Sweeney Has Great Jeans," has been criticized for promoting eugenics, a pseudoscientific theory that some genetic traits are superior to others. This has led to a wave of criticism and outrage, with many accusing the ad of being racist and offensive [1].

In response to the backlash, American Eagle issued a statement on Instagram, asserting that the campaign was always about the jeans and Sweeney's story. The company stated, "Great jeans look good on everyone" [1]. Despite this, the controversy has not subsided, with critics continuing to argue that the ad promotes harmful and discredited theories.

The controversy has had a notable impact on American Eagle's stock performance. Initially, the company's stock saw a 23% increase following the ad's release. However, as the backlash escalated, the stock experienced a decline. On Aug. 4, President Donald Trump defended the ad, which led to a 23.53% increase in American Eagle's stock price at the market's close [2]. Despite this, the company's stock has remained volatile, reflecting the ongoing debate and uncertainty surrounding the ad campaign.

The controversy highlights the challenges companies face in navigating conservative corporate culture. Bloomberg Businessweek national correspondent Joshua Green notes that the stakes are high for companies that must balance the need to attract conservative customers with the risk of alienating progressive consumers [3].

The future of American Eagle's stock performance will depend on how the company manages the ongoing controversy. While the ad campaign has generated significant buzz and attention, the backlash has also raised questions about the company's values and commitment to social responsibility. Investors and financial professionals should closely monitor the situation and consider the potential long-term impact on American Eagle's brand and financial health.

References:
[1] https://www.npr.org/2025/08/01/nx-s1-5487286/sydney-sweeney-american-eagle-explained-why-controversy-racist-eugenics-trump-bathwater-ad-klein-statement
[2] https://www.usatoday.com/story/money/2025/08/04/american-eagle-stock-trump-sydney-sweeney/85515756007/
[3] https://finance.yahoo.com/news/american-eagle-outfitters-aeo-declines-215002605.html