Donald Trump’s bump for American Eagle has fallen flat. (Photo: AEO)
Donald Trump waded into the controversy over American Eagle’s questionable ad featuring actress Sidney Sweeney’s “genes,” sending the stock up by double digits.
MAGA supporters and many on the political right rallied behind the campaign. But Trump’s bump has quickly fallen flat and created more headaches for the troubled retailer.
Trump snapped a four-day losing streak on Monday, sending shares soaring 23.65 percent.
Related: How American Eagle Objectified Sydney Sweeney and Blundered Into a Nazi Trope (Video)
“Sydney Sweeney, a registered Republican, has the ‘HOTTEST’ ad out there,” he wrote on Truth Social. “It’s for American Eagle, and the jeans are ‘flying of the shelves.’ Go get ’em Sydney!”
But nothing could be further from the truth.
Despite the Trump endorsement, American Eagle’s in-store visits fell 3.90% nationwide last week – coinciding with rising backlash over its campaign featuring Sweeney.
Sydney Sweeney was radiant this week at a screening for her new movie ‘Americana.’ (Photo by Vivien Killilea/Getty Images for Lionsgate)
Its the first notable drop in store traffic in weeks, suggesting that the controversy may be moving from digital discourse into consumer behavior, according to pass_by, a data analytics company.
The sharpest declines were seen among older shoppers and in more conservative U.S. regions. Consumers may have found the ad’s overt sexuality more disturbing than critics’ claims that it was a dog whistle for white supremacy.
“It’s rare to see a sudden, sharp drop like this after months of steady growth,” said James Ewen, VP Marketing at pass_by in a statement.
“When retail foot traffic patterns break trend so quickly, it’s usually cultural, this suggests the Sweeney controversy may be resonating beyond social media and into real-world consumer behavior.”
In step with the decline nationwide, in-store visits fell 9.25 percent in the South, 2.37 percent in the Midwest and 2.6% in the West, according to the firm’s data.
Oddly, only the Northeast saw a bump in visits. They rose there by 7.36 percent.
Trump-endorsed American Eagle is apparently turning off shoppers across all generations. In-store vists by Boomers fell 6.50 percent and Millennials by 5.04 percent.
Related: Sydney Sweeney Makes First Public Appearance, Gets Heckled on Heels of American Eagle Flap (Photos, Video!)
The ad was supposedly tailored to attract Gen Z customers, but in-store visits among that demographic fell by 3.63 percent.
The stock is still down 32 percent year-to-date. It fell almost 10 percent they day after the Trump bump and quickly settled back to its normal trading range.
It’s down 2 percent today (Aug. 7) at $12.57, and off 43.2 percent from its 52-week high, which ranges between $9.27 and $22.83.
Sales are off by 5 percent on the year and prospects are dim. American Eagle has pulled forward guidance and sharks are moving in on the stock.
Actress Sydney Sweeney is caught in a media firestorm over her jeans ad for American Outfitters. (Photo: AE)
Short interest has risen to about 12% of the total float, meaning investors are betting the stock will go lower. Analysts are forecasting a 2 percent decline in revenue for the upcoming 12 months, suggesting demand is weakening.
Analysts are projecting earnings of $0.81 per share and revenue of $5.19 billion, reflecting year-over-year declines of 53.45 percent and 2.58 percent, respectively.
On the plus side, the company is profitable, generating $196.7 million in net income over the past 12 months. Even more compelling, the stock is trading at a bargain valuation relative to earnings, according to one online stock watcher.
While the Sydney Sweeney ad raised the company’s profile, American Eagle executives have to be asking themselves whether the publicity was worth it.
The last thing they would want is for their products to get caught up in the ongoing culture wars and face a potential consumer boycott, which may well be in effect.
So far, the company has doubled down on the ad and refused to apologize for what some perceived as a negative message.
But clearly, Trump did it no favors by politicizing it and inflaming even more animous.