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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
Stock News Guru
1 Sep 14 14:04:49
$ARO: Aeropostale (ARO) Stock Gains on Heavy Trading Volume http://t.co/vJVR219Tvr http://t.co/Kc4Tx61DIB
James P Worthy
1 Sep 14 13:31:08
$ARO Aeropostale, Inc. (ARO) in Focus: Stock Adds 8.9% in Session http://t.co/GOVr5r2Log
Travelingcoolie
1 Sep 14 11:32:11
@kairyssdal alternatively, if we all walked around naked, this wouldn't be a big deal. Tho $GPS, $ARO, would go out of business
Stock Signaling
1 Sep 14 07:01:05
Top Stocks (By Trading Liquidity): $FOLD $CSIQ $SYNA $JRJC $ECOM $RFMD $ITMN $ARO $ESI $ECYT $JCP $CSLT $Z $ANV $PVA http://t.co/Vtx6dLy0Nw
12Stocks.com
1 Sep 14 03:04:00
Weekly SmallCap #Stocks Trend $RSH $ENZN $RPRX $CLUB $EXPR $ARO $ISIS $RALY $OMER $BDSI $GDP $ATRS more@ http://t.co/Giravo3fg9
12Stocks.com
1 Sep 14 03:03:40
Weekly Smallcap #Stocks Performance $RSH $ITMN $ENZN $RPRX $CLUB $FOLD $EXPR $ARO $ISIS $ACHN $RALY more@ http://t.co/Giravo3fg9
Biz News Pioneer
31 Aug 14 16:04:40
$ARO: Aeropostale Inc. (ARO) Q2 Earnings Preview: Virtually No Traffic http://t.co/goCxEewQrI http://t.co/iFkvn2SPDn
Claudia Poho Tosk
31 Aug 14 15:38:34
$ARO new floorset and customer feedback could be promising. http://t.co/MfmfAqjrcj
G. Thomas Lackey Jr
30 Aug 14 17:40:29
The Nitrous Scan 8/29/2014 http://t.co/eHg7ALTkpm $PPH $IYG $NYC $VIG $RCI $JPM $FIVE $ARO $LRCX $CAM $KO
12Stocks.com
30 Aug 14 03:04:35
Weekly SmallCap #Stocks Trend $RSH $ENZN $RPRX $CLUB $EXPR $ARO $ISIS $RALY $OMER $BDSI $GDP $ATRS more@ http://t.co/Giravo3fg9
12Stocks.com
30 Aug 14 03:04:14
Weekly Smallcap #Stocks Performance $RSH $ITMN $ENZN $RPRX $CLUB $FOLD $EXPR $ARO $ISIS $ACHN $RALY more@ http://t.co/Giravo3fg9
SShatzerLeness
29 Aug 14 21:52:04
☯Gain Followers ☯RT This ☯MUST FOLLOW ME I FOLLOW BACK ☯Follow everyone who rts ☯Gain #gameinsight #ONEDIRECTION $aro
Financial Updates
29 Aug 14 18:04:41
$ARO: Plugged-In Over Preppy: Teenagers Favor Tech Over Clothes http://t.co/7DgDvNd22U http://t.co/hNWeMGeAcG
Wealthpire
29 Aug 14 18:00:18
$ARO http://t.co/QY3Pu6V9pZ The time is right for this #pennystock
Fonde_aH_artwel
29 Aug 14 17:13:10
☯Gain Followers ☯RT This ☯MUST FOLLOW ME I FOLLOW BACK ☯Follow everyone who rts ☯Gain #FOLLOWBACK #RETWEET #ipad $aro
Rustin
29 Aug 14 12:18:36
best bottom plays right now: $WTW $NILE $LQDT $GMAN $BTH $NBG $ARO $BEBE $JCP $TZOO $PER
Trade Under Ten
29 Aug 14 11:34:47
“@sam_i_was: http://t.co/V0XLAUGHye” interesting article on the fate of teen retailers $ANF $ARO $PSUN
PennyStockSuperstar
29 Aug 14 10:18:59
$GPSN marching higher. Could explode with volume. Related: $EAPH $ARO $LIQD $LLLI $EPGL $SD $OREX $NBG $GLUU $ISNS $MONIF $NTEK $CRMBQ
Stock Signaling
29 Aug 14 09:31:03
Visual Stock Comparison Tool: http://t.co/Vtx6dLy0Nw : $SPLK $SLCA $AEO $AEGR $YGE $ARO $ECOM $ICPT $ARWR $ITMN $FOLD $TSLA $QIHU $X $JRJC
Business Headlines
29 Aug 14 09:04:48
$ARO: Aeropostale (ARO) Stock Gains on Heavy Trading Volume http://t.co/UA1GwIQxMW http://t.co/mEzdc1lDu5
Trefis.com
29 Aug 14 08:58:26
Abercrombie & Fitch Slips Again; Plans To Remove Logo Products Altogether http://t.co/DJK618gY4O by Trefis Team $ANF $AEO $ARO
Rustin
29 Aug 14 08:45:33
$ARO looking to get in soon
Adam Walder
29 Aug 14 08:22:43
Insider buys, higher AUR/GM enough for $aro rally. Eventually New fashion prod mix render AUR/GM increase more than offset oper deleverage
Thomas Moore
29 Aug 14 08:18:40
$aro is trying to push through to new highs.
US_proptrader
29 Aug 14 08:17:05
$ARO $GDP $SLCA $TKMR $TSEM $TUBE $YGE autocharts @ http://t.co/hj7PGeTQk3
Piet Friedrich
29 Aug 14 08:12:00
$ARO POPS :)
Alexander Morris
29 Aug 14 08:05:18
$ARO: At 1DyHIGH=4.20, hits:1, ch:+1.4%, 4phNewHi:BrkPLo[+201.9%], PrvCHi, tf:7f, MedFlt[56.6M], HiPctSht[36%:2d], DyVol:894T:0.2x:0.1x
Samuel Brown
29 Aug 14 08:00:32
$ARO Aeropostale, Inc. (ARO) in Focus: Stock Adds 8.9% in Session http://t.co/0EK69it4Dx
US_proptrader
29 Aug 14 07:10:05
$ARO $ARWR $FEYE $GTAT $ISNS $RFMD $XCO autocharts @ http://t.co/hj7PGeTQk3
WKRB News
29 Aug 14 04:44:57
Insider Buying: Kenneth B. Gilman Buys 30,000 Shares of Aeropostale Stock $ARO http://t.co/umCTIMatFM
Alysia Sarkisian
29 Aug 14 02:01:02
RT @SeekingAlpha: Why Aeropostale Is No Bargain Even At Current Prices http://t.co/HJTFtx3GNB $GPS $ARO
Seeking Alpha
29 Aug 14 01:57:35
Why Aeropostale Is No Bargain Even At Current Prices http://t.co/HJTFtx3GNB $GPS $ARO
Berlinbeing
28 Aug 14 22:23:25
RT @zerosum24: Under-$10 watchlist for Wednesday - http://t.co/wlrXYOW9Yt $OGXI $CNCE $VTNR $XOMA $ACRX $CYTR $TXMD $HZNP $ARO $CUR article…
Market Updates
28 Aug 14 22:04:42
$ARO: Plugged-In Over Preppy: Teenagers Favor Tech Over Clothes http://t.co/JvKZzOMOlc http://t.co/2GsFPf1W4d
Hereitfirst
28 Aug 14 21:21:04
Took a loss on $USTC $ARO Uploaded a few wins few free to criticize comment etc. Daily picks coming… http://t.co/a3t7Mp0HCu
Hereitfirst
28 Aug 14 21:17:18
http://t.co/CBiF3rBqWV Verified $72.04 loss in $ARO =[
Stock Signaling
28 Aug 14 18:01:12
Movers and Shakers: $RFMD $TWTR $MNK $TKMR $PEIX $FEYE $LIVE $CIEN $AMBA $GALE $HERO $ARO $YGE $BAS $EXAS http://t.co/Vtx6dLy0Nw #daytrading
John Ablemann
28 Aug 14 15:00:19
$ARO Aeropostale, Inc. (ARO) in Focus: Stock Adds 8.9% in Session http://t.co/pQ3CMxIw75
Rob Wilson
28 Aug 14 11:42:51
More inconvenient $ANF math: GPM% declines in combined Q1/Q2 2014 vs. LY... $ANF = -270 Bps... $AEO = -120 Bps... $ARO = -154 Bps.
Business Updates
28 Aug 14 11:04:47
$ARO: Aeropostale, Inc. (ARO) in Focus: Stock Adds 8.9% in Session http://t.co/p38UR20d0V http://t.co/tdGUk4Ir8T
Daily Contracts
28 Aug 14 11:03:00
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/alc5rr5Nkd
Market Headlines
28 Aug 14 10:04:45
$ARO: Why Aeropostale (ARO) Stock Is Falling Today http://t.co/e2geuMBSC6 http://t.co/qhRx5Ayiwz
Dan
28 Aug 14 09:39:25
two crappy retailors dailys setting up for next week $BEBE $ARO
Piet Friedrich
28 Aug 14 09:31:04
Looks like $ARO is warming up!!
Swing Trade Alerts
28 Aug 14 07:36:46
THEFLYNEWS:$ANF $ARO $URBN $AEO Abercrombie drops as Q2 sales fall below analysts' estimates: Full Story http://t.co/824IrzpjZZ
The Fly
28 Aug 14 07:34:15
$ANF $ARO $URBN $AEO Abercrombie drops as Q2 sales fall below analysts' estimates: Full Story http://t.co/UK1RVWcasa
US_proptrader
28 Aug 14 07:25:03
$ARO $CHS $CLDX $DGLY $ETRM $JRJC $LEJU $PWE $SGOC autocharts @ http://t.co/hj7PGeTQk3
Business News Now
28 Aug 14 07:04:47
$ARO: Aeropostale Reports Results For Second Quarter Of Fiscal 2014 http://t.co/NfFqWEqeyN http://t.co/MSksr0w2Kc
EPS Trader
28 Aug 14 07:00:15
$ARO is breaking out above $4.06 with positive earnings and a target of $4.62.
US_proptrader
28 Aug 14 06:52:03
$ACHN $ARO $ARWR $ATHM $EJ $TKMR $TSL $YGE $YOKU autocharts @ http://t.co/hj7PGeTQk3
				
				
By  +Follow August 23, 2013 8:15AM
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