Goldman Sachs Reiterates Sell Rating on Aeropostale Following New Floor Set Initial View

In a report published Tuesday, Goldman Sachs analyst Lindsay Drucker Mann reiterated a Sell rating and $8.00 price target on Aeropostale ARO.

In the report, Goldman Sachs noted, “We reiterate our Sell rating on ARO following our initial view of its new floor set. This is the first glimpse of the company's strategy shift toward more fashion product. Our major concern is that ARO may have gone too far, too fast, with a risky strategy: (1) ARO guided that only 20% of the mix of ‘basics' would be switched to fashion product, but the shift in store looked more dramatic to us. (2) Opening price points on key items looked high for ARO's value oriented customer. (3) We expect ARO will be at a disadvantage to a formidable fast-fashion competitive set that has established fashion credibility and offers price points at similar – if not lower – levels than ARO's.”

Aeropostale closed on Monday at $14.95.