Aeropostale (ARO) Stock Sinking Following Quarterly Loss, Weak Outlook

NEW YORK (TheStreet) -- Shares of Aeropostale (ARO) were sinking, sharply down 15.83% to $2.18 in early market trading Friday, following the release of the struggling teen apparel retailer's first quarter financial results after the closing bell yesterday.

"First quarter sales fell 20%, on 19% less square footage amid store closures, and a sharp 11% drop in comp sales, as ARO cited off-brand merchandise, colder weather and West Coast port shutdown," said S&P Capital IQ senior equity analyst Tuna Amobi in a note this morning.

The firm cut its price target to $2.50 from $3, while maintaining a "hold" rating.

Aeropostale posted a loss of $45.3 million, or a loss of 56 cents per share in its fiscal first quarter, a wider than expected loss compared to the loss of 55 cents per share analysts polled by Thomson Reuters were expecting.

Revenue of $318.6 million also fell short of the consensus estimate of $325 million for the period, according to analysts polled by Thomson Reuters.

In the same quarter of last year, Aeropostale posted a loss of 52 cents per share on revenue of $395.9 million.

The teen retailer reported comparable sales, including the e-commerce channel, fell by 11% in the quarter.

Looking ahead, Aeropostale forecasts second quarter 2015 loss of between 60 cents to 52 cents per share, worse compared to the consensus estimate for a loss of 37 cents per share.

Shares closed at $2.59 in Thursday's regular session.

New York City-based Aeropostale is a mall retailer of casual apparel and accessories for teenagers and younger kids.

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