Aeropostale (ARO) Turnaround Delayed, Not Dead Thinks Analyst

Yesterday Aeropostale (NYSE: ARO) reported holiday comps were down 8 percent, well below consensus estimates of down 2 percent. Aeropostale also reported sales declined 6 percent, reflecting weakness in core basics, including graphics and fleece.

Commenting on developments, analyst Lee J. Giordano of Imperial Capital said, "While the anticipated turnaround has not yet materialized, we continue to believe in the long-term opportunity for a return to positive comp trends and operating margin improvement."

Giordano believes the fashion and fashion basics assortment at ARO continues to evolve and should make a bigger impact on sales and margins in 2013.

"The company will look to focus on speed to market with an emphasis on relevant fashion, not fast fashion," said Giordano "There will be more frequent fashion deliveries as well as a stronger localization strategy that should eventually benefit the business, in our view."

Imperial Capital has an Outperform rating on Aeropostale, Inc. (NYSE: ARO) with a modified price target of $15.00 (from $18.00).

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 $13.24 yesterday.

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