Aeropostale shares down on slower back-to-school season
Shares of clothing company Aeropostale, Inc. (NYSE:ARO) were lower on Friday after the retailer announced it experienced a slower-than-expected back-to-school rush for new clothes, Reuters reports.
The announcement came amid heavy insider trading, which suggests these executives who are making the trades may know something about the potential direction of the stock.
According to the news source, the company admitted it offered too many basic apparel options and not enough unique fashions, which led to a major slump in profits as teenagers flocked to rival Gap for the clothes.
"We believe it is vital that the company improves upon this and grows its fashion offering quickly," Stifel Nicolaus analyst Richard Jaffe wrote in a research note, adding that the promotional environment in teen retail isn't done for the season.
Aeropostale described the lower sales as a "soft start" to the strong buying season, and CEO Thomas Johnson stated that he believes the company's topline and margins will be "under pressure" for the rest of the third quarter.
Investors may want to keep an eye on Aeropostale for any further insider trading activity.
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