• by Sarah Mahoney , over 1 hour ago

AEO Inc., parent company of American Eagle Outfitters and Aerie, reported stronger-than-expected third-quarter results, with revenue rising 6% to a record $1.4 billion. Net income increased 6.7% to $91.3 million.

Executives emphasized the impact of recent marketing initiatives for American Eagle Outfitters, including the “Sydney Sweeney has great jeans” campaign, its latest collaboration with NFL player Travis Kelce, and new holiday content featuring Martha Stewart. Comparable sales for the American Eagle banner, however, rose just 1%, with men’s apparel outperforming women’s.

Aerie, its lingerie banner, delivered the bulk of the company’s sales momentum, with comparable sales increasing 11% in the quarter. The company said that strength has continued into the fourth quarter, noting record sales over Thanksgiving weekend, particularly at Aerie and Offline by Aerie, its activewear sub brand.

Executives also highlighted long-term expansion potential for Aerie and Offline by Aerie, which together generate just under $2 billion in annual revenue and hold less than 5% U.S. market share.

Marketing was a significant focus on the call, with leadership attributing recent campaigns to increased visibility. “By collaborating with high-profile partners who are defining culture, we are attracting more customers and have more eyes on the brand than ever before,” said Jennifer Foyle, president and executive creative director of AE and Aerie. “Combined, the Sydney Sweeney and Travis Kelce partnerships have garnered more than 44 billion impressions.”

Demand exceeded expectations in some cases, causing temporary stock shortages. “That was something we did not expect,” Foyle said.

The Sydney Sweeney jeans campaign, which promoted items that sold out in two days, also generated controversy. Some consumers and online commentators interpreted the phrase “good jeans” as a play on “good genes,” calling it racially insensitive. The culture wars spiraled on social platforms and drew commentary from public figures, including President Donald Trump, who defended the actor and the campaign.

Some analysts and commentators suggested the controversy might alienate the brand’s Gen Z and millennial customer base. But on the earnings call, the company’s chief financial officer said the campaign drove significant gains in digital traffic.

Aerie’s ads also got plenty of notice in the quarter, with a new “100% Real” campaign vowing to never use AI in its imagery.

AEO raised its fourth-quarter outlook and now expects comparable sales growth of 8% to 9%, ahead of the 2% increase analysts projected.