Sydney Sweeney's American Eagle Ad Boosts Stock Despite Declining Foot Traffic

American Eagle Outfitters' (AEO) stock has risen 16.26% since launching its Sydney Sweeney advertising campaign. However, new data shows foot traffic to physical stores has declined by nearly 9% YoY. The stock's gain is attributed to President Trump's endorsement, but fundamental retail metrics show mixed signals, with the stock down 24% YTD.

American Eagle Outfitters (AEO) has seen a significant rise in its stock price, up 16.26% since the launch of its Sydney Sweeney advertising campaign [1]. However, recent data indicates a decline in foot traffic to physical stores by nearly 9% year-over-year (YoY). This mixed performance has raised questions about the sustainability of AEO's stock gains.

The stock's recent surge can be attributed to President Trump's endorsement, which has boosted consumer sentiment and driven demand for the brand [1]. However, the underlying retail metrics paint a mixed picture. While the company has seen a 34.01% gain in share price over the past month, it has also experienced a 24% year-to-date (YTD) decline, highlighting the volatility in the stock's performance [2].

Analysts have responded to these developments with a range of price targets and ratings. Morgan Stanley has set a target of $10.00, while JPMorgan Chase & Co. has reached as low as $9.00. Several analysts have issued "hold" ratings, with a few suggesting a "sell" rating [1]. The average rating for AEO is "hold," with an average price target of $14.70 [1].

The company's latest earnings report showed a decline in earnings per share (EPS) and revenue compared to the same quarter last year. The EPS was $0.29, missing the consensus estimate by $0.04, and revenue was $1.09 billion, down 4.7% YoY [1]. Despite these mixed signals, institutional investors have been increasing their positions in AEO, with several hedge funds and asset management firms raising their stakes [1].

Investors should keep a close eye on AEO's upcoming earnings disclosure, as analysts predict a significant decline in EPS and revenue for the current fiscal year. The Zacks Rank system, which considers estimate changes, has downgraded AEO to a "Strong Sell" rating, indicating a potential decline in stock price performance [2].

In conclusion, while AEO's stock has seen a significant rise due to external factors, the company's retail metrics and analyst ratings suggest a mixed outlook. Investors should carefully consider these factors before making investment decisions.

References:
[1] https://www.marketbeat.com/instant-alerts/american-eagle-outfitters-nyseaeo-trading-down-56-heres-why-2025-08-05/
[2] https://www.nasdaq.com/articles/american-eagle-outfitters-aeo-declines-more-market-some-information-investors