Aeropostale Inc. (ARO), a mall-based specialty retailer of casual apparel, said Thursday its first-quarter profit fell from last year, as higher cost of sales and other expenses offset growth in its topline.
Earnings for the quarter came in line with Street estimates, while sales topped expectations, partly on positive same-store sales growth.
Moving forward, Aeropostale detailed a weak earnings outlook for the second quarter, which is expected to miss current analysts' expectations.
Aeropostale' net sales for the quarter rose 6 percent year-over-year.
Comparable sales, including the e-commerce channel, rose 2 percent for the quarter, compared to a 5 percent decline last year. Excluding e-commerce, comparable sales were flat.
CEO Thomas Johnson said, "During the first quarter, we continued to make progress on our key initiatives, and we experienced a significant improvement in trends versus the fourth quarter..."
New York-based Aeropostale reported first-quarter net income of $10.6 million or $0.13 per share, compared to $16.4 million or $0.20 per share last year.
Net sales for the quarter were $497 million, compared to $469 million last year. Analysts expected sales of $487.14 million for the quarter.
At the end of the quarter, Aeropostale operated 1,067 stores, compared to 1,027 stores a year ago.
Aeropostale expects second-quarter net earnings of $0.03 to $0.05 per share, while analysts currently expect earnings of $0.06 per share.
CEO Johnson said, "While I am pleased with the sequential progress we are making in our business, the overall retail environment remains uncertain and we are early in the cycle of executing our key initiatives. As we move through the remainder of the year, we continue to focus on improving our financial performance and our profitability."
ARO closed Thursday at $17.71, down $1.00 or 5.34%, on a volume of 5 million shares on the NYSE. In after hours, the stock gained $0.30 or 1.69%.
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