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Aeropostale Losses Accelerate, Closing More Stores

By  +Follow August 23, 2013 8:15AM
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Joining a growing list of retailers to limp through the second quarter, Aeropostale, Inc. (ARO) delivered its financial report for the quarter that was short on both top and bottom lines.  The mall-based specialty retailer further delivered bleak guidance for the current quarter and said it is shuttering more stores than it originally anticipated. To a degree, the soft report was expected as the company pre-announced that sales were falling, but that didn't stop shares from getting hammered in after-hours trading.

Net sales for the quarter ended August 3 fell by 6 percent to $454.0 million from $485.3 mllion in the second quarter last year.  Wall Street was expecting revenue of $453.97 million.

The company reported a net loss of $33.7 million, or 43 cents per share, compared to a net profit of $71,000, or nil per share, in last year’s quarter.  On an adjusted based, which excludes one-time items like after-tax charges, the net loss was trimmed to $26.9 million, or 34 cents per share.  Analysts were expecting an adjusted net loss of 34 cents per share.

Same-store sales, a closely watched metric of growth that compares sales at stores open more than one year, decreased by 15 percent compared to the second quarter of 2012.  Aeropostales’ comparable sales include its e-commerce business as well.

Net sales from the e-commerce business rose 22 percent to $39.0 million from $31.9 million last year, but also included revenue from the company’s purchase of GoJane.com in November 13, 2012.

Deep discounts stung gross profit margin, which fell 740 basis points to 17.9 percent.

“Our business was pressured by a challenging teen retail environment with weak traffic trends and high levels of promotional activity.  Our results were particularly disappointing given the level of change we have registered with the Aeropostale brand in recent periods," said Thomas P. Johnson, chief executive at Aeropostale in a statement.

During the quarter, the company closed 9 Aeropostale stores and one of its P.S. from Aeropostale stores.  The New York-based company previously said that it would be closing between 15 and 20 Aeropostale stores during 2013.  Today, they hiked that number to between 30 and 40 locations.

To make matters worse, the company said it expects to lose between 21 cents and 26 cents per share during the third quarter as it continues to face hefty headwinds from a lot of promotions in the competitive teen retail environment, even through the back-to-school period.  Analysts were expecting earnings of 25 cents per share.  In the third quarter of 2012, Aeropostale banked a profit of 31 cents per share.

Companies focused on teen apparel have been getting lumped up recently as their core market seems to be shifting to different brands and what they spend their money on, often preferring electronics it seems. Abercrombie & Fitch (ANF) , once one of the hottest brands around, whiffed on second-quarter results today as well, sending shares 17.7 percent lower. American Eagle (AEO) delivered soft guidance on Wednesday, pitching shares from $16.40 to $14.75.  The circle of lower sales and profits is being perpetuated as each of the companies is on a slashing prices spree trying to lure in shoppers.

Shares of ARO have had a tough month, to say the least.  From a high of $15.73 on August 1, shares have sunk 30 percent through Thursday’s close at $10.98.  The bleeding is not stopping in extended trading following the earnings report, with shares down to $9.70 an hour after the news hit.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for ARO
Dan
25 Oct 14 08:20:58
$ARO OI for maturity 11/22/2014. 4.00 Highest put. 4.00 Highest call. http://t.co/zxzNPf5Afl
FonsieTrader
25 Oct 14 05:56:46
Parabolic Sar Sell Signals 1/3 $AAN $ACC $AMRN $AMX $AMZN $ARO $BEBE $CFX $CLW $CMCM $DECK $DLB $DLIA $DRYS $EC http://t.co/6Q2Qih7ubw
Julie
24 Oct 14 16:04:43
RT @StockSignaling: After Hours Price Advances: $INVN $DECK $KTOS $MRK $SWN $ZMH $ELNK $BWLD $VALE $IPI $ARO $WEC $CY $FLR $SODA http://t.c…
David (no relation)
24 Oct 14 16:03:13
RT @StockSignaling: After Hours Price Advances: $INVN $DECK $KTOS $MRK $SWN $ZMH $ELNK $BWLD $VALE $IPI $ARO $WEC $CY $FLR $SODA http://t.c…
Dave
24 Oct 14 16:01:36
RT @StockSignaling: After Hours Price Advances: $INVN $DECK $KTOS $MRK $SWN $ZMH $ELNK $BWLD $VALE $IPI $ARO $WEC $CY $FLR $SODA http://t.c…
Stock Signaling
24 Oct 14 16:01:18
After Hours Price Advances: $INVN $DECK $KTOS $MRK $SWN $ZMH $ELNK $BWLD $VALE $IPI $ARO $WEC $CY $FLR $SODA http://t.co/Vtx6dLy0Nw #finance
Stocks&Blondes
24 Oct 14 11:43:19
Reinvesting small profits into $aro down here on $anf and $aeo downgrades. Like the changes and trades at .1 times revenue
The Fly
24 Oct 14 09:21:37
Abercrombie & Fitch retreats after Goldman cuts to Sell $ANF $AEO $ARO $URBN $GPS $PSUN: Full Story http://t.co/P7KgQou0xt
Cristobal Barberis
24 Oct 14 09:10:14
Fast fashion eating traditional’s lunch $ARO http://t.co/AYfku6ZUwp
Thomas Collins
24 Oct 14 09:03:06
$ARO Has Aeropostale Found A New Opportunity? (ARO) http://t.co/0SLZGMtSYQ
Harry Walkman
24 Oct 14 07:02:45
$ARO Has Aeropostale Found A New Opportunity? (ARO) http://t.co/SJDsBVR2A1
Sarang
24 Oct 14 03:16:17
Aeropostale upgraded by Zacks to outperform. $3.60 PT. http://t.co/2kfHqVVP0Q $ARO #ARO via @RatingsNetwork
Shaun
23 Oct 14 13:08:00
RT @TickerReport: Aeropostale Raised to “Outperform” at Zacks $ARO http://t.co/VcoCLB8Vqd
Mike DeSenne
23 Oct 14 10:07:10
Stocks to sell by year-end to offset capital gains: $ARO $ANR $DMD $EMDC $ONE $ESI $ZQK $WLT http://t.co/xHKNqYq98r
Clair Voight
23 Oct 14 07:02:41
$ARO Why Aeropostale Inc's Stock Has Crashed 68% in 2014 http://t.co/wk37jq7UmO
John Turner
23 Oct 14 07:02:39
$ARO Has Aeropostale Found A New Opportunity? (ARO) http://t.co/w4VoaPmhKJ
Calvin Cobb
23 Oct 14 06:15:01
@jimcramer sorry $APC not $ARO, $ARO not gonna be around much longer
Calvin Cobb
23 Oct 14 06:11:48
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Ticker Report
23 Oct 14 03:29:06
Aeropostale Raised to “Outperform” at Zacks $ARO http://t.co/VcoCLB8Vqd
Andy L.
23 Oct 14 02:32:06
RT @StockSignaling: Services Sector: Upgrades: $BABA $FRO $ARO $SSI $ODP $DRI $CLUB $NCLH $PLCE $VAC $AL $CHTR $COST $WERN $NWSA http://t.c…
Stock Signaling
23 Oct 14 02:31:23
Services Sector: Upgrades: $BABA $FRO $ARO $SSI $ODP $DRI $CLUB $NCLH $PLCE $VAC $AL $CHTR $COST $WERN $NWSA http://t.co/Vtx6dLy0Nw #analyst
sandy maltzman
22 Oct 14 18:02:29
RT @EliLanger: Now that's something. Vine superstars create clothing line that'll be available in every @Aeropostale: https://t.co/YGdCKsPl…
Jenny Shaab
22 Oct 14 17:58:27
RT @EliLanger: Now that's something. Vine superstars create clothing line that'll be available in every @Aeropostale: https://t.co/YGdCKsPl…
CNBC Social Media
22 Oct 14 17:58:01
RT @EliLanger: Now that's something. Vine superstars create clothing line that'll be available in every @Aeropostale: https://t.co/YGdCKsPl…
Eli Langer
22 Oct 14 17:52:51
Now that's something. Vine superstars create clothing line that'll be available in every @Aeropostale: https://t.co/YGdCKsPl8c • $ARO
HotKeyTrading
22 Oct 14 13:00:05
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US Banking News
22 Oct 14 12:34:25
Aeropostale Raised to Outperform at Zacks $ARO http://t.co/kslvcfnEux
Media Sentiment
22 Oct 14 12:05:10
$ARO received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 509
Analyst Ratings
22 Oct 14 12:03:11
Aeropostale upgraded by Zacks to outperform. $3.60 PT. http://t.co/cxp5rcVUPI $ARO #ARO
US Banking News
22 Oct 14 11:57:04
Equities Research Analysts’ Upgrades for October, 22nd $ARO, AVIV, BMO, BRKR, CPT, CUDA, EXEL, FICO, FRO, FSFR http://t.co/5TuwEakGFL
InterCooler
22 Oct 14 11:51:12
Aeropostale Lifted to Outperform at Zacks $ARO http://t.co/Ix1X0ScY6b
US Consumer News
22 Oct 14 11:50:02
Aeropostale upgraded by Zacks to outperform. $3.60 PT. http://t.co/Qn9QBQMxPB $ARO #ARO
Alexander Morris
22 Oct 14 08:12:48
$ARO: At 1DyHIGH=3.04, hits:1, ch:+2.5%, 0phNewHi:BrkPLo[+202.7%], tf:0111111, MedFlt[54.6M], HiPctSht[41%:8d], DyVol:336T:0.2x:0.1x
Irma Doucet
20 Oct 14 12:32:28
$ARO Why Aeropostale Inc's Stock Has Crashed 68% in 2014 http://t.co/M8tH39B6dT
James P Worthy
20 Oct 14 12:32:27
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20 Oct 14 07:02:46
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20 Oct 14 05:36:28
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Darlene S Williams
20 Oct 14 05:33:14
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Darlene S Williams
20 Oct 14 05:28:02
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Fredrick
17 Oct 14 20:09:42
RT @theflynews: $URBN $AEO $ANF $ARO $GIII Urban Outfitters slumps after warning on continued retail sales weakness: Full Story http://t.co…
equities.com
17 Oct 14 19:30:34
Aeropostale Inc. (ARO) Drops 7.37% on October 17 $ARO http://t.co/niWqldv0Br
Dave
17 Oct 14 18:23:33
RT @theflynews: $URBN $AEO $ANF $ARO $GIII Urban Outfitters slumps after warning on continued retail sales weakness: Full Story http://t.co…
DaTrader
17 Oct 14 17:58:46
RT @theflynews: $URBN $AEO $ANF $ARO $GIII Urban Outfitters slumps after warning on continued retail sales weakness: Full Story http://t.co…
Daily Contracts
17 Oct 14 14:46:00
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/alc5rr5Nkd
				
				
By  +Follow August 23, 2013 8:15AM
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