American Eagle Outfitters Inc ( AEO ) shares are surging Thursday after the company reported better-than-expected financial results for the second quarter.

What Happened: American Eagle beat analyst estimates on the top and bottom lines in the second quarter, reporting revenue of $1.28 billion versus estimates of $1.24 billion, and earnings per share of 45 cents versus estimates of 20 cents.

Total inventory increased 8% year-over-year to $718 million. American Eagle ended the quarter with $126.78 million in total cash and cash equivalents.

“The fall season is off to a positive start. Fueled by stronger product offerings and the success of recent marketing campaigns with Sydney Sweeney and Travis Kelce, we have seen an uptick in customer awareness, engagement and comparable sales,” said Jay Schottenstein, executive chairman and CEO of American Eagle.

American Eagle has seen increased retail participation in recent weeks that was sparked by a viral ad from actress Sydney Sweeney. The company also recently announced a limited-edition product collaboration with Travis Kelce's sportswear and lifestyle brand.

American Eagle said it expects comparable sales growth in the low single-digit range for both the third and fourth quarters.

Following the retailer’s quarterly results, Telsey Advisory Group analyst Dana Telsey maintained American Eagle with a Market Perform and raised the price target from $12 to $18. UBS analyst Jay Sole maintained a Buy and raised the price target from $19 to $21.50.

AEO Price Action: American Eagle shares were up 32% at $18.00 at the time of publication on Thursday, according to Benzinga Pro.

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