Aeropostale Inc. (NYSE: ARO) is scheduled to report its fiscal third-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for a net loss of $0.35 per share on $392.67 million in revenue. In the same period of the previous year, the retailer posted a net loss of $0.45 per share on revenue of $452.89 million.
This company is slowly coming to the understanding that it may need to turn to e-commerce to survive in the future. Aeropostale only saw growth in one segment over the past three years: international licensing. Unfortunately, it only represents a tiny 2% of the company’s revenue in fiscal 2014. Perhaps Aeropostale could take it a few steps further and focus exclusively on licensing all of its products to someone else and make Amazon the sole seller.
At this time in the previous year, Julian Geiger had just taken over the CEO position at Aeropostale with the goal of returning the company to profitability. However, this has not been the case over the past year. In fact during this time Aeropostale has slipped even lower; just 52 weeks ago the stock was over the $2 mark.
Some might even suspect, with the performance that this company has had over the past few years that this might be a brand that disappears in the near future. These earnings are crucial if Aeropostale expects to stay alive.
Ahead of the earnings report, a few analysts weighed in on Aeropostale:
- Topeka Capital Markets has a Hold rating and a price target of $3.50.
- SunTrust has a Neutral rating and a $3.50 price target.
- Wunderlich has a Hold rating and lowered its price target to $0.50 from $3.50.
So far in 2015, Aeropostale has vastly underperformed the market, with the stock down nearly 77% year to date. However, over the past 52 weeks the stock is down roughly 85%.
Shares of Aeropostale closed Monday down over 14% at $0.54, with a consensus analyst price target of $1.39 and a 52-week trading range of $0.47 to $4.39. They were up more than 2% shortly after Tuesday’s opening bell.