$AEO Crushed Earnings -- These 2 Stocks are Next

American Eagle (AEO) has staged one of the biggest turnarounds we’ve tracked YTD, driven by what should be surprising to no one: hot blondes sell.

We noted bullish traction for the once-mighty denim king ahead of Q2 earnings.

And this week, $AEO was our trade of the week — netting Earnings Season Pass members a gain of +102% in 3 days.

American Eagle delivered:

• Record Q3 revenue of $1.36B, up 6% YoY, with EPS of $0.53 up 10% and $0.09 ahead of the Street.

• Comps flipped positive at +4%: Aerie +11% across intimates, sleep, and Offline; AE brand +1% with men back to growth and jeans as the anchor.

• Management says the turn is accelerating into holiday, guiding Q4 comps of +8–9% with both brands already trending above that after a strong Thanksgiving weekend.

• Denim is back on fire. Women’s top five jeans were planned up +25% and demand came in up ~50%; Sydney Sweeney jeans sold out in about two days and Black Friday was AE’s biggest denim day ever for jeans.

Bottom line: the Sydney Sweeney, Travis Kelce, and Martha Stewart campaigns drove 44B impressions, more than 1M new loyalty members, and surging digital traffic where growth is running ahead of stores…despite media sandbagging.

All in all, American Eagle shares are trading +75% higher from pre-Sweeney results printing in September of this year.

We saw this coming from a mile away because we listen to Main Street.

And we don’t think this is the only turnaround story in retail right now.

In fact, our real-time read on consumer Black Friday shopping behavior reveals 2 stocks that just logged record-breaking digital activity.

The best part? Both stocks have been forgotten by Wall Street.

• A major winner of the K-shaped economy trading -20% lower YoY

• A left-for-dead consumer favorite trading -46% lower YoY

Andy breaks down exactly what we are watching on this week’s Founders Call.

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