UPDATE: Imperial Capital Downgrades Aeropostale Following 2Q13 Results
In a report published Friday, Imperial Capital analyst Lee J. Giordano downgraded the rating on Aeropostale (NYSE: ARO) from Outperform to In-Line, and lowered the price target from $17.00 to $10.00.
In the report, Imperial Capital noted, “While we had previously been patient in our expectations for a turnaround in the business, we are now increasingly concerned that improvements could be further delayed given the highly promotional environment for teen retail which could limit upside in the shares in the intermediate term. Management's guidance for 3Q was well below our expectations and comp trends have deteriorated further in August with weak traffic trends leaving us increasingly uncertain about the timing of a potential turnaround. We continue to believe the company is better positioned from a fashion merchandise perspective and has the potential to improve its sales and margins longer term, however, the path ahead will likely prove challenging and would recommend taking a wait-and-see approach to the shares.”
Aeropostale closed on Thursday at $10.98.
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