Specialty retailer of casual apparel and accessories,
) declared the launch of its 'P.S. from Aeropostale' brand in
Mexico. The launch was made through a licensing collaboration with
local departmental store chain operator Distribuidora Liverpool,
S.A. de C.V.
The opening of the company's first outlet in Mexico was
celebrated in Jul 2014 at the Sante Fe Mall. The retailer's further
plans of expanding its P.S. from Aeropostale brand to Mexico
includes the introduction of branded shop-in-shops in Liverpool
department stores, apart from opening standalone outlets.
For quite some time now, Aeropostale has been struggling to
strengthen its market position as this mall-based specialty
retailer of casual apparel has posted losses for five straight
quarters. Aeropostale, along with its peers American Eagle
Outfitters, Inc. (
) and Abercrombie & Fitch Co. (
), has been under tremendous pressure as the teen retail
environment remains challenging.
In the most recent quarter, the company recorded an adjusted net
loss of 52 cents a share that is wider than the adjusted loss of 16
cents in first-quarter fiscal 2013. However, the adjusted loss was
narrower than the Zacks Consensus Estimate of a loss of 72
Additionally, the Zacks Rank #3 (Hold) company's sales plunged
12% to $395.9 million, with comparable-store sales (comps)
declining 13% year over year versus a 14% fall last year. Net sales
also came below the Zacks Consensus Estimate of $410.0 million.
Sales disappointed mainly due to soft traffic and erratic
Hence, management seems very optimistic about this brand's
launch in Mexico as Aeropostale witnessed rapid growth in the
country over a one-year period. By furthering its presence to
Mexico, the company is also on track to strengthen its global
Moreover, by extending its partnership with Liverpool, the
company is most likely to achieve success as Liverpool has great
experience in running the largest Mexican departmental stores and
Aeropostale brands. Liverpool's experience is likely to benefit the
company, which intends to introduce over 100 P.S. outlets in the
next few years.
Going forward, the company plans to remain focused on
undertaking initiatives to transform and grow its brand. With
sustained implementation of operational, marketing and
merchandising strategies, coupled with its cost-curtailment
program, Aeropostale is likely to improve in the long term.
A better-ranked stock in the same industry is Citi Trends, Inc.
), with a Zacks Rank #1 (Strong Buy).
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