Aeropostale is getting crushed and analysts aren't sure about its turnaround strategy
On Thursday evening, the company reported an adjusted earnings per share loss of $0.56, compared to estimates for $0.55, according to Bloomberg.
The company reported sales of $318.6 million, below estimates for $326.2 million.
These results had been expected, and were caused by some of the same things that have affected the rest of the retail sector: "We worked our way through a number of issues, including a merchandise assortment that was not consistent with our future direction, unseasonably cool weather, and the West Coast port slowdown," CEO Julian Geiger said in the earnings release.
The company said it is pinning its recovery on the upcoming 'Back to School' period.
"As I have said previously, the Back to School period represents the time when all of the disciplines and strategies we have instituted over the last nine months should come to fruition," Geiger said.
But analysts are doubtful about how successful this will be. The company forecasts a loss of between $0.52 and $0.60 in the second quarter, which came in below consensus expectations.
In a note Friday, Jeffries analysts reduced their price target to $2.50 from $3. The stock fell to as low as $2.14 per share in trading.
They wrote: "We credit mgmt's many efforts to stave off operational losses and cash bleed. And while optimism around back-to-school may prove legitimate, the reality is that visibility remains limited, in our view. We need clearer confirmation of traction building in order to build confidence here."
Analysts at FBR & Co. were also downbeat, lowering their price target.
"We like the Back To School confidence and initiatives; but, given the competitiveness of the segment and uncertainty around traffic, customer acquisition, and merch traction, we believe that execution risk remains."
The stock is down 6% year-to-date, and has erased 51% of its value over the last 12 months.
Here's a chart showing the slide in shares over the last several years, with the stock falling over 90%.
