Aeropostale (NYSE:ARO) Hit a 52-week Low – Investors are Not Impressed


Things do not look good for Aeropostale (NYSE:ARO) because of the lack of confidence its investors are showing in the accessories and apparel retailer.

Aeropostale (NYSE:ARO) is a specialty retailer that sells accessories and casual apparel in mall-based shops. The main target audience for the company falls in the 14 years to 17 years age bracket. The retailer also has an online presence, giving its customers freedom to shop from the comfort of their homes. Not many people are aware of the fact that Aeropostale (NYSE:ARO) have almost 986 stores across the United States, Canada and Porto Rico. The company also has presence in South East Asia and the Middle-East. Aeropostale (NYSE:ARO) back in 2012 acquired the famous online apparel website for women by the name of The retailer also has New York based three street-level stores as well.

However despite its nation-wide stores, Aeropostale (NYSE:ARO) is in deep waters with its investors. The main reason was the company’s earnings reports for its third quarter of fiscal 2014. After the retailer announced its results the stock took a dip in share value by 29.8%. On the year-over-year basis the stock value plummeted by 75.3%. On Wednesday Aeropostale (NYSE:ARO) stock hit its 52-week low at a value of $2.13.

Analysts’ estimates and predictions Aeropostale (NYSE:ARO) have also become quite disappointing after the results came out on the 3rd of December. The future outlook for the specialty retailer looks nothing but bleak at the moment. The biggest indicator of this lack of confidence came from consensus estimates by Zacks, which came down from a $1.80 loss to a $1.83 loss for fiscal 2014; this plunge took place within 7 days of announcing the result. Things do not look good for fiscal 2015 as well; consensus estimates by Zacks for 2015 came down from $1.09 to $1.23 within the same 7 days.

Sales figures for Aeropostale (NYSE:ARO) also did not impress its investors and analysts. Net sales for the retailer went down by 12% and hit the mark of $452.9 million; whereas its comparable-store sales went down by 11% on a year-over-year basis; these comparable-store sales also included the retailer’s e-commerce channels. This wasn’t the only bad news for Aeropostale (NYSE:ARO); the company’s adjusted loss was reported to be 45 cents a share, which was in harmony with consensus estimates by Zacks; however it was a lot more than last year’s same quarter’s 20 cents loss / share.

Aeropostale (NYSE:ARO) is currently facing the problem of aggressive promotion and weak traffic, which is costing some serious money to the company. Moreover it is also facing some stiff competition from same-category retailers (teen market retailers), which have much better marketing and business plans.

Aeropostale’s (NYSE:ARO) Chief Executive Officer Julian R. Geiger is determined to put the company back on track as she continues to take different measure to improve its overall performance and brand presence. Geiger is hopeful that the company will see better performance due to new and sustainable marketing, merchandising and business strategies that will be coupled with its cost-cutting program. Currently Aeropostale (NYSE:ARO) has a ranking of Hold and No. 3 by Zacks.