Brean Capital Downgrades Aeropostale, Inc. (ARO) to Hold after Weak Q4 Guidance
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Price: $0.15 --0%
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 21 | New: 20
Rating Summary:
5 Buy, 25 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 21 | New: 20
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Brean Capital downgraded Aeropostale, Inc. (NYSE: ARO) from Buy to Hold.
The firm comments, "We are pulling back in the near term, after Aeropostale registered highly disappointing Holiday comps and materially cut 4Q guidance. While Black Friday results were solid, the rest of the Holiday season was washed out due to competitive pressures and what we view as limited levels of fashion product. Despite lower cotton costs and what we viewed as solid inventory levels for the industry, Aero continues to struggle in the face of what appears to be a permanently lower pricing environment for the teen sector. Furthermore, with inventory levels appearing heavy, we believe there is the potential for the bleeding to leak into 1HFY14; with the new Head Merchant not materially impacting results into 2HFY14, we see, at best, ARO being "dead money" in the near term and, at worse, further disappointing into 1Q; as such, we are moving to the sidelines a little bruised and battered. We continue to like the management team and the story, but now is not the time to be heroic, especially with tough weather comparisons affecting the entire industry in 1HFY14."
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $13.37 yesterday.
The firm comments, "We are pulling back in the near term, after Aeropostale registered highly disappointing Holiday comps and materially cut 4Q guidance. While Black Friday results were solid, the rest of the Holiday season was washed out due to competitive pressures and what we view as limited levels of fashion product. Despite lower cotton costs and what we viewed as solid inventory levels for the industry, Aero continues to struggle in the face of what appears to be a permanently lower pricing environment for the teen sector. Furthermore, with inventory levels appearing heavy, we believe there is the potential for the bleeding to leak into 1HFY14; with the new Head Merchant not materially impacting results into 2HFY14, we see, at best, ARO being "dead money" in the near term and, at worse, further disappointing into 1Q; as such, we are moving to the sidelines a little bruised and battered. We continue to like the management team and the story, but now is not the time to be heroic, especially with tough weather comparisons affecting the entire industry in 1HFY14."
For an analyst ratings summary and ratings history on Aeropostale, Inc. click here. For more ratings news on Aeropostale, Inc. click here.
Shares of Aeropostale, Inc. closed at $13.37 yesterday.
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