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What: Shares of discount retailer Aeropostale
So what: It's official: We've entered a backwards parallel dimension, wherein Aeropostale is guiding lower and perennial underperformer Gap
Well, here we are again! Because of a weaker start to the all-important back-to-school season, Aeropostale is slashing EPS estimates for the third quarter to a range of $0.25 to $0.30 versus Wall Street expectations for $0.38. Aeropostale noted that discounting and competition from its peers is dragging on its bottom-line results.
Now what: Who would have thought that a discount retailer based in malls would be having issues with discounts and competition? Where's my "Duh!" button? In all seriousness, though, the apparel industry is highly cyclical, and Aeropostale is not a company you typically want to be holding on to when consumer spending and U.S. GDP figures are weakening. Although I like Aeropostale over the long term, as its brand name alone will carry sales with younger audiences, after a second earnings warning just this month, I'm not even remotely intrigued by the stock here.
Craving more input? Start by adding Aeropostale to your free and personalized watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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