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Aeropostale Posts Quarterly Loss; Sees Another


Teen apparel retailer Aeropostale, Inc. (ARO) said Thursday after the markets closed that it swung to a fourth quarter loss, hurt by lower sales, weaker margins and higher asset impairment charges.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly sales.

Thomas Johnson, Aeropostale's Chief Executive Officer, said, "Our results for the fourth quarter and fiscal year were disappointing; however, we made progress during 2012 against our strategic initiatives."

Looking forward, the company said it expects to report a loss of $0.15 to $0.20 per share for the first quarter, compared to earnings of $0.13 per share in the same quarter last year. Analysts currently expect the company to earn $0.08 per share for the first quarter.

"We anticipate a challenging first quarter as a result of expected margin pressures from Holiday carryover inventory, and the impact of a weak macroeconomic environment," CEO Johnson said.

Rival American Eagle Outfitters, Inc. (AEO) earlier this month reported forecast-missing fourth quarter profit and gave a weak earnings outlook for the first quarter.

Aeropostale shares are currently losing 6.62% in after hours trading after closing the day's regular trading session at $14.51, up 8 cents. The shares trade in a 52-week range of $11.76 to $23.05.

For the fourth quarter ended February 2, 2013, New York-based Aeropostale reported a net loss of $0.7 million, or $0.01 per share,.compared to net income of $26.1 million or $0.32 per share for the year-ago quarter.

The latest quarter results include an after-tax charge of $19.7 million, or $0.25 per share, resulting from store asset impairment charges, while the year-ago quarter results included an after-tax charge of $9.5 million, or $0.12 per share, resulting from store asset impairment charges.

Excluding the store asset impairment charges, adjusted net income for the fourth quarter was $19.1 million or $0.24 per share, compared to $35.6 million or $0.44 per share in the prior year quarter.

On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.22 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Gross margin for the fourth quarter shrank to 19.8% from 24.3% a year ago.
Net sales for the fourth quarter fell 1% to $797.71 million from $808.38 million in the same quarter last year. Twenty analysts had a consensus revenue estimate of $775.70 million for the fourth quarter.

Fourth quarter comparable sales, including the e-commerce channel, fell 8%, while it fell 9% excluding the e-commerce channel.

Net revenues from the company's e-commerce business for the fourth quarter, including net revenues from the GoJane business beginning November 14, increased 16% to $96.8 million from $83.2 million a year earlier.

The company said it plans to open about 14 Aeropostale stores, about 60 P.S. from Aeropostale stores, remodel about 30 stores, and close about 15 to 20 Aeropostale stores in its fiscal year 2013.

The company expects to invest about $89.0 million in its store growth and certain information technology, compared to capital expenditures of about $72.3 million in fiscal 2012.

by RTTNews Staff Writer

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