Is Aeropostale Destined for 52-Week Lows After Earnings?

Aeropostale Inc. (NYSE: ARO) reported its fiscal first-quarter earnings after the markets closed Thursday. The company had a net loss of $0.56 per share on $318.6 million in revenue. That compared to Zacks consensus estimates of a net loss of $0.54 per share on $325.3 million in revenue. The same quarter from last year had $0.97 per share net loss and $395.86 million in revenue.

The company gave guidance for the second quarter, expecting a per-share net loss of $0.52 to $0.60. There are consensus estimates of a net loss of $0.37 per share and revenue of $400.59 million.

The “back-to-school” period represents the time when Aeropostale expects that all of its disciplines and strategies instituted over the past nine months will come to fruition. In an effort to prepare for this selling season, the company is focusing on “optimizing the quantity and composition” of its merchandise.

Julian Geiger, chief executive of Aeropostale, commented on earnings:

As we anticipated, the first quarter of 2015 represented a period of transition for us. 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. However, the performance of our women’s division exceeded our expectations, and we were encouraged by the demand we were able to create through certain key items and promotions.

The company reported cash and cash equivalents of $75.95 million at the end of the first quarter, compared to $151.75 million at the end of the 2015 fiscal year. To finish the quarter, Aeropostale had long-term debt of $141.1 million. At the same time, the company had no borrowings outstanding and availability of $137.8 million under its revolving credit facility.

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Shares of Aeropostale closed Thursday up 2.8% at $2.59. In premarket trading Friday, shares were down as much as a whopping 20% at $2.08, but they opened around $2.19. The stock has a consensus analyst price target of $3.47 and a 52-week trading range of $2.13 to $4.39.