Aeropostale stock tanks again after reported fourth-quarter loss

Aeropostale Stock Losing More Ground

Aeropostale stock tanked again on Thursday after it reported an adjusted net fourth-quarter loss of $10.8 million on net revenue of $498 million. The company’s stock dropped 47.83 percent to 25 cents a share in morning trading.

The company added that it expects first-quarter 2016 losses if $24 million to $29 million, or a net loss of 35 cents to 42 cents per diluted share. USA Today reports that the losses are caused by a few reasons. The company has an ongoing vendor dispute with MGF Sourcing, an affiliate of Sycamore Partners. The dispute is disrupting the supply of some merchandise and could cause additional operating losses if it isn’t resolved.

The clothing chain is also struggling to maintain its popularity as a trendy teen fashion store. CEO Julian Geiger noted that Aeropostale hopes to change this by differentiating apparel offerings between “factory stores” and mall outlets.

Geiger explained that both stores will get many of the same products, but “there will be factory exclusives and mall exclusives that will be geared specifically to the customer preferences we’ve identified.” Geiger added, “We believe that our revised merchandise assortment and our more targeted merchandise allocation approach in our factory chain will reinvigorate our stores.”

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CNN Money notes, however, that Geiger’s announcement didn’t do much to keep Aeropostale stock alive in trading. The company’s stock was trading at 27 cents, or 94.48 percent lower than two years ago. Hakon Helgeson, a retail analyst at Conlumino, noted of the company, “Being the weakest player in a weak market is a very uncomfortable position…one that could yet lead to the eventual failure of the chain.”

Helgeson isn’t the only analyst predicting the eventual destruction of the apparel company.

Aeropostale announced on Thursday that it plans to explore “financial alternatives, including a potential sale or restructuring.” The company didn’t mention if the financial alternatives include a possible bankruptcy filing.

Given the current state of Aeropostale stock, and the fact that it has just $65 million in cash, it’s unclear if the apparel company would find a buyer.

Written by Jeff Springer

Jeff Springer

Jeff Spring is the Finance & Markets Editor at He's currently spending his days backpacking across Europe. While he may be living outside of the United States, he stays connected to American financial markets and M&A's more than is probably healthy for any single person. His love of a good book and a Bloomberg terminal can't be understated.