American Eagle shares jump as celebrity campaigns to bolster holiday demand

Dec 3 (Reuters) - American Eagle Outfitters' AEO.N shares surged nearly 12% before the bell on Wednesday after the retailer lifted its annual sales forecast, betting on celebrity partnerships and marketing campaigns to boost demand during the holiday season.

Successful campaigns featuring actor Sydney Sweeney, collaborations with NFL player Travis Kelce's clothing brand Tru Kolors and a pivot to affluent buyers have helped the company counter a broader retail slowdown driven by inflation and trade tensions.

"As a company, we're leaning into advertising. We need to compete when we see what our competition is doing," said Jennifer Foyle, chief creative officer.

"This marketing will certainly amplify."

The retailer 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.

"American Eagle will have to continue to invest in marketing spend to continue to drive share gains on top of these successes," Barclays analysts said in a note.

"The teen space remains highly competitive and as we roll forward into 2026, we believe the anniversary of such campaigns may be more challenging."

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 stock has risen about 25% so far this year, and trades at a 14.74 forward price-to-earnings multiple, above peer Abercrombie & Fitch's ANF.N 9.86 and Urban Outfitters' URBN.O 13.63.