Zacks Investment Research downgraded
Aeropostale, Inc. (
to a Zacks Rank #5 (Strong Sell) on Aug 23.
Why the Downgrade?
Aeropostale has witnessed sharp downward estimate revisions
after reporting dismal second-quarter fiscal 2013 results. Shares
of this teen apparel retailer have been on a downtrend since the
beginning of August and given its sluggish third quarter outlook,
it has more downside left.
On Aug 22, Aeropostale posted adjusted loss per share of 34
cents for second-quarter fiscal 2013. This compared to the
break-even results posted in the year-ago quarter. The Zacks
Consensus Estimate for the quarter was a loss of 24 cents.
Including one-time items, the quarterly loss came in at 43 cents
Aeropostale's gross profit tumbled 33.9% to $81.2 million,
whereas gross margin contracted 740 basis points to 17.9%.
However, excluding one-time items, gross margin contracted 570
basis points, reflecting decreased merchandise margins and
deleveraging of non-merchandise costs.
Going forward, Aeropostale stated that weak traffic, higher
costs and competition will adversely affect its margins and in
turn earnings. Consequently, it expects to report loss per share
in the range of 21 cents to 26 cents in the third quarter of
The Zacks Consensus Estimate for fiscal 2013 plunged
significantly in the last 7 days. It now stands at a loss of 55
cents per share, down from earnings of 20 cents. For fiscal 2014,
most of the estimates were revised downward over the last 7 days,
bringing down the Zacks Consensus Estimate to a loss of 10 cents
per share from the earnings of 48 cents.
Other Stocks to Consider
Not all apparel retailers are performing as dismally as
L Brands, Inc.
), all of which hold a favorable Zacks Rank #2 (Buy) are worth
ANN INC (ANN): Free Stock Analysis Report
AEROPOSTALE INC (ARO): Free Stock Analysis
DSW INC CL-A (DSW): Free Stock Analysis
L BRANDS INC (LTD): Free Stock Analysis
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