Shares of American Eagle soared 20% on Monday after former President Donald Trump praised their marketing featuring actress Sydney Sweeney. He took to his social media platform, Truth Social, to call Sweeney’s campaign the “Hottest ad out there,” noting that “the jeans are flying off the shelves.”
This surge came shortly after American Eagle announced Sweeney would headline their fall marketing with the tagline, “Sydney Sweeney has great jeans.” Initially, the stock experienced fluctuations due to what some termed “meme stock mania,” but struggled after facing criticism about the campaign. The backlash included accusations of sexualization and suggestions that the tagline implied something about Sweeney’s physical appearance rather than the jeans themselves.
Despite the controversies, American Eagle’s statement explained that the slogan is simply about the jeans. They emphasized celebrating diversity in how people wear their AE jeans.
This marketing situation illustrates the challenges brands face today. Marketers must carefully select messaging that resonates with varying audiences. A recent lesson from Bud Light shows the pitfalls of campaigns perceived as “woke,” whereas American Eagle’s approach leans toward a more traditional appeal.
In recent financial reports, American Eagle revealed they were grappling with declining sales. They forecasted a revenue drop of 5% and indicated that their gross margins would be lower than last year. The company had also reported a $75 million write-down of leftover merchandise due to sluggish consumer demand.
However, there may be hope for recovery. Google trends indicate search interest for American Eagle has reached its highest point in over two decades, though it’s unclear if this will translate into sales.
The landscape of retail advertising is rapidly changing. Companies must balance timely cultural sensitivity with effective marketing strategies. As the situation evolves, it will be interesting to see how American Eagle’s strategy impacts its bottom line in the upcoming earnings report.
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