Back-to-School Trends Improving, But Still Too Early to Declare Victory on Aéropostale (ARO) - Stifel

Stifel affirms its Hold rating on Aéropostale, Inc. (NYSE: ARO) following the retailer's Q2 results issued Thursday night.

Analyst Richard Jaffe noted that ARO's loss of $0.56 per share was flat with the firm's estimate.

Jaffe noted the following key takeaways from the report:

• Merchandise Looks Better - Overall, we believe the merchandise looks better with more on-trend colors and a more balanced assortment of core, fashion basics and fashion offerings that cater to the “real” teenager (not the fashionista teen who isn’t ARO’s target customer). Additionally, a robust merchandise testing process and localized product allocation should result in lower inventory risk through more relevant product offering, reducing markdowns and benefitting margins.
• Back-to-School Trends Improve – August month-to-date, comp sales are down in the low-single-digits, a significant improvement vs. (8)% in 2Q. Given the late Labor Day TY, only stores in the early back-to-school portion of the country have completed a full back-to-school floorset cycle. These stores, likely benefiting from the shift in the tax free holidays, have a positive comp month to date. In August, girl’s trends have continued to improve, comping positive chain wide. Men’s has also improved but comps continue to be negative.

For an analyst ratings summary and ratings history on Aeropostale click here. For more ratings news on Aeropostale click here.

You May Also Be Interested In

• HSBC Downgrades Feng Tay Enterprises (9910:TT) to Hold
• American International Group (AIG) PT Raised to $89 at Piper Sandler
• BMO Capital Reiterates Outperform Rating on National Health Investors (NHI)