American Eagle bets on promotions to forecast upbeat sales, shares jump 25%

American Eagle Outfitters forecast third-quarter comparable sales above expectations on Wednesday, betting on the demand driven by promotions and new products, sending the shares of the apparel retailer up 25% after the bell.

Apparel firms such as American Eagle and Abercrombie & Fitch have defied a slowdown in the retail sector through promotions and a focus on more affluent consumers.

American Eagle has been trying to boost demand through its marketing initiatives, including the controversial “Great Jeans” denim campaign with actress Sydney Sweeney, following partnerships with tennis player Coco Gauff and actress Jenna Ortega.

The apparel maker has also partnered with National Football League player Travis Kelce’s clothing brand Tru Kolors, creating buzz among shoppers as the news followed Kelce’s engagement to pop star Taylor Swift.

The company expects quarterly comparable sales to rise in the low single digits, compared with analysts’ expectation of a 0.3% decline, according to data compiled by LSEG.

It also expects annual comparable sales to be flat compared to a year ago, while analysts estimated a decline of 1.1%.