Aeropostale Takes Steps to Revive - Analyst Blog

By
A A A

For quite some time now, Aeropostale, Inc. ( ARO ) has been struggling to strengthen its market position. This mall-based specialty retailer of casual apparel has posted losses for 4 straight quarters and has seen its stock crash about 45% so far in the year. In an effort to uplift itself and focus on avenues with growth potential, the company undertook certain strategic initiatives.

Aeropostale now plans to shutter 125 mall-based P.S. from Aeropostale stores by the end of fiscal 2014. The rationale behind the step is the changing consumer shopping pattern, habits and preferences. In fiscal 2013, the company registered pre-tax losses of approximately $15 million from its mall-based business. As a result, it now intends to concentrate on off-mall locations, e-commerce, international licensing and other third party distribution channels. 

The company is also focusing on areas where it can contain cost. As part of this endeavor, the company plans to lower its workforce by approximately 100, which is in addition to the job cut that will result on account of store closure.

Management hinted that the initiatives announced would help in generating annualized pre-tax savings of approximately $30 million to $35 million, of which approximately $5 million to $10 million is expected to be attained in fiscal 2014. Aeropostale also reiterated its first-quarter fiscal 2014 operating losses between $64 million to $68 million, resulting in net loss of 70 cents to 75 cents a share.

Aeropostale, which  holds a Zacks Rank #4 (Sell), operates 854 Aeropostale outlets in 50 states and Puerto Rico, 77 Aeropostale stores in Canada and 150 P.S. from Aeropostale stores in 31 states and Puerto Rico.

Other Stocks That Warrant a Look

Other better-ranked retail stocks that look promising and are expected to continue with their upbeat performance include Skechers USA Inc. ( SKX ) holding a Zacks Rank #1 (Strong Buy), and Foot Locker, Inc. ( FL ) and American Apparel, Inc. ( APP ) both carrying a Zacks Rank #2 (Buy).



AMER APPAREL (APP): Free Stock Analysis Report

AEROPOSTALE INC (ARO): Free Stock Analysis Report

FOOT LOCKER INC (FL): Free Stock Analysis Report

SKECHERS USA-A (SKX): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: APP , ARO , FL , SKX

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

How to Fire Your Adviser
How to Fire Your Adviser            

Stocks

Referenced

100%
54%
67%
100%

Most Active by Volume

75,750,465
  • $16.77 ▲ 0.36%
59,791,764
  • $101.58 ▲ 0.71%
38,720,622
  • $42.59 ▼ 0.28%
37,416,417
  • $46.52 ▼ 0.51%
35,101,793
  • $16.28 ▲ 0.74%
34,987,975
  • $99.53 ▲ 0.15%
33,760,830
  • $3.63 ▲ 0.69%
32,148,671
  • $17.61 ▲ 0.57%
As of 9/17/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com