American Eagle Outfitters' shares fell over 11% in premarket trading on Thursday due to stagnant quarterly gross-margin forecast, despite beating Wall Street expectations for second-quarter revenue. The retailer's main brand has experienced persistent weakness, contributing to a 36% decline in its shares this year. American Eagle has been using high-profile celebrity marketing, including the "Great Jeans" campaign featuring Sydney Sweeney, to capture spending from wealthier Gen Z consumers amid inflation. The company's stock trades at a forward price-to-earnings multiple of 9.38, lower than rivals Abercrombie and Gap.
Written by the local model on 2026-09-10,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
American Eagle Outfitters shares plummeted 11% in premarket trading on Thursday after a disappointing quarterly forecast overshadowed a slight revenue increase. This decline comes exactly one year after the company launched its controversial marketing campaign featuring actress Sydney Sweeney, which aimed to appeal to wealthier Gen Z consumers who are less affected by inflation. The campaign's impact has been offset by persistent weakness in American Eagle's main brand, driven in part by shoppers' preference for essential items over discretionary purchases due to economic uncertainty. As a result of this trend, the company's shares have declined 36% so far this year. Executives cited rapid shifts in fashion trends and inventory mismatches with consumer preferences as contributing factors to the company's struggles. Despite these challenges, American Eagle has announced plans to continue the "Great Jeans" campaign, including new elements featuring Sweeney.
Written for “American Eagle Stock Plunge” on 2026-09-10,
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No political leaning scored for article 7638 · logged 2026-09-10
American Eagle Outfitters shares tumbled more than 11% in premarket trading on Thursday after a stagnant quarterly gross-margin forecast overshadowed a second-quarter revenue beat, driven by persistent weakness in its main brand—a year on from launching its controversial "Great Jeans" campaign featuring Sydney Sweeney.
asserted
forecast → tumble → Sweeney
Erratic demand across the clothing sector has led price-conscious shoppers to prioritize essentials over discretionary purchases and hold out for promotional sales, contributing to an approximate 36% decline in the retailer's shares this year.
asserted
demand → lead → shares
Executives noted on Wednesday that ongoing markdowns are clearing older stock after rapid shifts in fashion trends left portions of inventory mismatched with consumer preferences.
asserted
portions → note → preferences
Aiming to capture spending from wealthier Gen Z consumers as inflation hits lower- and middle-income households, American Eagle has turned to high-profile celebrity marketing, including its "Great Jeans" campaign starring actor Sydney Sweeney.
asserted
Eagle → aim → Sweeney
"'Sydney Sweeney Has Great Jeans' (the ad campaign) is not going anywhere.
asserted
Has → go → campaign
Sydney will be part of our team as we get into the back half of the year, and we'll be introducing new elements of the campaign as we continue forward," Chief Marketing Officer Craig Brommers said in September 2025.
asserted
Brommers → get → September
Although the campaign faced social media backlash over perceived racial undertones concerning genetic traits, it delivered what Brommers called "unprecedented new customer acquisition" during earnings disclosures at the time.
asserted
Brommers → face → time
The retailer is also benefiting from a tie-up with National Football League (NFL) star Travis Kelce, husband of pop superstar Taylor Swift, partnering with his Tru Kolors brand to expand its audience among young shoppers.
asserted
retailer → benefit → shoppers
Customer numbers grew by over 700,000 around the Sweeney and Kelce campaign launches, generating 40 billion impressions.
asserted
numbers → grow → impressions
American Eagle has previously teamed up with celebrities including tennis player Coco Gauff and actress Jenna Ortega.
asserted
Eagle → team → Gauff
For the quarter ended August 1, brand expenses rose 14% year-on-year, driven in part by costs connected to additional tariffs.
"Earnings power is unlikely to improve and low valuation remains justified by several overhangs, including elevated inventory levels and Aerie's ability to sustain recent momentum," stated Morgan Stanley analysts.
asserted
analysts → end → momentum
Second-quarter sales topped Wall Street expectations as strong performance from Aerie, the women's intimates and activewear line, cushioned softer demand for the core label.
asserted
performance → top → label
For the current quarter, gross margins are projected to remain flat from a year earlier, alongside mid-single-digit comparable sales growth forecasted for fiscal year 2026.
asserted
margins → project → year
The stock trades at a forward price-to-earnings multiple of 9.38, compared to rivals Abercrombie at 11.47 and Gap at 8.91.
asserted
stock → trade → 8.91
