Market Overview

Aeropostale's Rough Friday: 'Brand Relevancy' At Stake


Aeropostale (NYSE: ARO) had a rough day Friday with shares tumbling more than 10 percent on disappointing outlook for the second half.

Shares of the troubled teen apparel retailer are down more than 60 percent year to date and Topeka's Dorothy S. Lakner noted it's too soon after the recent return of Chief Executive Julian Geiger last week to hear of new profit strategies.

The 68-year-old Geiger had served as head of Aeropostale from 1998 to 2010 and was named August 18 to replace Thomas Johnson, effective immediately.

"We'll have to wait until December to hear Geiger's thoughts on bringing Aeropostale back to profitability," Lakner said, maintaining a Hold rating and $4 target Friday.

The company has said it plans to shutter 20 percent of its stores over time, which should curb losses "but the bigger issue is brand relevancy," UBS' Roxanne Meyer said in a research note.

Meyer, who maintained a Neutral rating and $3.50 target, praised Aeropostale's recently widened margin and inventory improvements.

But Meyer said promotional pricing throughout the industry will continue to hurt Aeropostale and its big bet on denim is counter to current fashion trends.

Aeropostale closed Friday off 9.9 percent at $3.52.

Latest Ratings for ARO

Aug 2015Initiates Coverage onPeer Perform
Jul 2015DowngradesNeutralSell
May 2015MaintainsMarket Perform

View More Analyst Ratings for ARO
View the Latest Analyst Ratings

Posted-In: Dorothy S. Lakner Roxanne MeyerEarnings News Guidance Price Target Reiteration Analyst Ratings


Related Articles (ARO)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Best and Worst ETFs Of The Week Amid Jackson Hole Central Bank Conference

Yellen's Speech Not Enough To Keep Dow, S&P 500 In Positive Territory