Wedbush Lowers Price Target On Aeropostale

According to Wedbush, Aeropostale ARO has a new lower $20 price target. Wedbush said that with Q2 guidance below consensus as we anticipated, it expects the stock to remain under pressure in the near-term as management indicated that product issues will likely persist through Q2. “Noting lingering carryover inventory from Q1 requiring additional markdowns and promotions, gross margin will deteriorate further than originally expected and possibly retrace levels last witnessed in F05. With a business model predicated on strategic promotions in a highly competitive teen retail landscape, we believe the company could continue to struggle passing through higher input costs. While designs are expected to improve by BTS and Fall, we believe comps may trend negatively until Q4 when ARO begins to lap easier compares and foresee few catalysts in the horizon to drive share appreciation.” Aeropostale closed yesterday at $21.34.