The stock closed out the morning at $3.45, down $1.07 or 23.7 percent, after hitting a 52-week low of $3.37, their lowest mark in more than 10 years. Shares hit their 52-week high of $16.82 exactly one year ago.
Analysts expressed concern both about the chain’s liquidity and its ability to catch on with shoppers in the youth market, which has shown a growing affection for fast-fashion retailers at the expense of conventional teen merchants.
Late Thursday, the New York-based specialty chain, spun off in 2002 from a private label initiative at Macy’s, reported a $76.8 million loss, greater than analysts expected as well as that of a year ago. Sales contracted 12.5 percent to $395.9 million and declined 13 percent on a same-store basis.
The projected loss of between 55 and 61 cents a share for the second quarter was also deeper than the 29-cent-a-share loss expected by analysts prior to the first-quarter report.
Jefferies analyst Randal Konik lauded the company’s “little victories” in the first quarter but said they were “not enough to move the needle. The relative outperformance of fashion product and newer sub-brands is encouraging, just not enough to offset deterioration of the core businesses.” He also noted the firm’s 3.9 percent decline in inventories as a positive.
“We laud management’s fervor toward attacking every angle possible to stabilize the business, be it store closures, securing external financing, reducing [capital expenditures],” he wrote in a note to clients. “Still, many quarters into the downturn, the dots aren’t connecting in terms of the financial results or outlook.”
Wells Fargo analyst Paul Lejuez estimated that Aéropostale’s cash burn for the current year would be $100 million and about $49 million in fiscal 2015. “Though ARO has found some wins in fashion — Live Love Dream, Bethany Mota, Tokyo Darling — the basic and core fashion business, 85 percent of the assortment, remains pressured,” he wrote.
Investors and analysts had also hoped that the first-quarter report would bring an update on the company’s plan to raise $150 million through a cash infusion from Sycamore Partners, which many now expect to close next month.
“Although the company has a $230 million revolver in place, without the closure of the Sycamore deal, liquidity becomes a major issue as the company burns through cash in efforts to restructure the business,” said Eric Beder, Brean Capital analyst, who reiterated his “hold” rate for the stock.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews