Economics is a social science concerned with how resources are allocated under different scenarios. A foundational principle is “de gustibus non est disputandum,” which roughly translates to “one should not argue over matters of taste.” In other words, economists don’t make scientific judgments about consumer preferences. If people want more strawberries and fewer bananas, economists don’t ask whether that’s good or bad. Economists simply analyze how the change in preferences affects various markets. 

Most goods are multi-dimensional. Consumers value products not just for utility but for attributes like style, comfort, and symbolism. Clothing, in particular, serves as both function and expression. For example, a pair of blue jeans may vary in style, fit, comfort, and durability. Marketers understand this well, crafting products and campaigns to resonate with their target audiences. 

Enter American Eagle Outfitters (AEO) and actress Sydney Sweeney. AEO launched a campaign featuring Sweeney modeling their jeans under the tagline “Sydney Sweeney Has Great Jeans,” a play on genetics and denim. Genes-Jeans. Get the pun? Calvin Klein ran a similar campaign with heartthrob Brooke Shields in 1980, which similarly blurred the line between fashion and genetics.  

The public’s reaction was swift and polarized. Critics argued the campaign disparaged previous models who represented different body types, appearances, and identities. Accusations ranged from fat-shaming and racism to tone-deafness and fascism. Some called for a boycott. Others celebrated the campaign as a rejection of “woke” marketing and a return to normalcy in advertising, pledging to support the brand more enthusiastically. 

One way to assess which narrative prevails is by considering its impact on AEO’s bottom line. Stock prices, after all, are forward-looking indicators. July 21st, two days before the campaign launched, AEO traded at $9.92 per share. At the time of writing, it’s up 23.6.5% to $12.26. Over the same period, the S&P 500 declined 0.1%. The stock price may react differently in the future for any number of reasons, but for now, it reflects investor expectations about how consumers will respond.  

Economics doesn’t tell us whether this is good or bad, nor does it take sides. But it does suggest that share prices send signals. If consumers reward AEO with higher sales and investors respond with higher valuations, that’s a market verdict. If consumers punish AEO with lower sales and investors respond with lower valuations, that’s a market verdict too. Economics doesn’t judge the goals people pursue; it analyzes the impacts of their pursuits.