Why Aeropostale Inc Shares Got Crushed Again

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of teen-oriented apparel retailer Aeropostale Inc (NYSE: ARO  ) plummeted 22% today after its quarterly results and outlook disappointed Wall Street.

So what: The stock has plunged over the past year on rapidly declining fundamentals, and today's Q4 results -- loss of $76.8 million on a revenue decline of 12% -- coupled with downbeat guidance only reinforce that trend. In fact, same-store sales during the quarter fell a whopping 13%, versus Wall Street's expectation of just a 9% drop, suggesting that Aeropostale's brand continues to weaken at a surprisingly brisk pace.

Now what: Management now sees a Q1 loss of $0.55 to $0.61 per share, worse than the consensus per-share loss of $0.50. "[A]t the close of the quarter, we took additional actions to build on our turnaround efforts from the past year, restructuring our P.S. from Aeropostale business and expanding our expense savings program," said CEO Thomas Johnson. "We remain focused on strengthening our company operationally and financially as we continue to implement our strategies to reposition the Aeropostale brand." Of course, given the extremely low visibility into how management actually plans to right the ship, Fools would probably be better off watching from the sidelines. 

Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development Dream Team to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out...and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, AND the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2970092, ~/Articles/ArticleHandler.aspx, 10/22/2014 12:05:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement