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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
Daily Contracts
25 Nov 14 11:58:01
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/FqjcZjvBSB
Daily Contracts
25 Nov 14 11:46:12
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/FqjcZjvBSB
leahanne
25 Nov 14 10:57:35
Volume Alert - ARO 3.51 Aeropostale Inc $ARO Hit a high today of 3.69 Closing the day 10:30 at 3.51 -0.03 -0.8 http://t.co/m242bSVkRJ
leahanne
25 Nov 14 10:57:12
$ARO Volume Alert - ARO Stock 3.51 Aeropostale Inc $ARO Hit a high today of 3.69 Closing the day 10:30 at 3.51 -0.0 http://t.co/FgJcxsPlpr
Trader News Daily
25 Nov 14 10:36:43
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
clayton
25 Nov 14 08:37:03
ARO 3.61 Aeropostale Inc $ARO added to my watch list. Right now with ARO I am watching the last price 3.61 Hig http://t.co/60E9M6J3VD
clayton
25 Nov 14 08:36:41
$ARO ARO 3.61 Aeropostale Inc $ARO stock added to my watch list. Right now with ARO I am watching the last price 3. http://t.co/LSRQFjiz1p
Robert Mondavi
25 Nov 14 08:09:49
$ARO pulling back after a nice run
danrocks
25 Nov 14 07:55:24
Right now ARO is number 31 for the largest percentage gain out of 250 stocks. $ARO ARO is up +19.67% in the la http://t.co/XLmfFIBwgH
danrocks
25 Nov 14 07:55:02
$ARO ARO Stock is number 31 for the largest percentage gain out of 250 stocks. $ARO ARO is up +19.67% in the last 5 http://t.co/iHD4KGmtvl
Anthony Allyn
25 Nov 14 07:12:06
$ARO reverses course http://t.co/kUzwjTH2Ms
RnM Enterprises
25 Nov 14 07:05:25
$ARO out -.18 ... sigh
investor wired
25 Nov 14 06:20:27
Analyzing Hot Stocks Using Technicals: http://t.co/ucpRpyAvd3 s$CIMT $PTP $ARO #HotStocks
Girolamo Aloe
25 Nov 14 05:47:01
I watch $ECRY $TENX $MAGS $MNDO $SYN $OCLR $APPY $ARO - I like buy on the break out. But today I stay focused to short - #pennystocks #money
Trader News Daily
25 Nov 14 05:04:21
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
Zero Filter
25 Nov 14 04:49:20
#Aeropostale should change name to #AeroNow with dramatic changes underway #fastfashion #SycamorePartners $ARO $XRT http://t.co/AaJ1bQ0PW8
Lucas Ciura
25 Nov 14 02:58:17
@jimcramer any thoughts on Aeropostale $ARO, are they ready for a turnaround?
Trader News Daily
25 Nov 14 00:09:54
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
chartguy89
24 Nov 14 20:29:22
ARO 3.54 Aeropostale Inc Stock Charts $ARO Last Updated: 11/24/14 Last price: 3.54 Total volume: 3,186,616 ARO http://t.co/c6sSZqYRKy
chartguy89
24 Nov 14 20:29:06
$ARO ARO 3.54 Aeropostale Inc Stock Charts $ARO Last Updated: 11/24/14 Last price: 3.54 Total volume: 3,186,616 ARO http://t.co/dk13uM1qGM
Jake13
24 Nov 14 20:26:28
ARO Year to date has changed -61.06% percent. +22.07% in the last 30 days. $ARO Aeropostale Inc Full breakdown http://t.co/PkEGgDSSjZ
Jake13
24 Nov 14 20:26:06
$ARO ARO Stock year to date has changed -61.06% percent. +22.07% in the last 30 days. $ARO Aeropostale Inc Full bre http://t.co/jA6Dle2iCE
Trader News Daily
24 Nov 14 19:10:10
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
NelsNYC
24 Nov 14 18:05:16
$ARO - http://t.co/zDApbX0Clv http://t.co/hXO1FSVW1Z #stockcharts
OhNo5000Bees!
24 Nov 14 17:35:10
Tues watch: Momo: $SYN, $ARIA, $BEAT, $CCG, $DENN, $EVC, $HGG, $SMSI, $JCP, $FOLD Chart: $ANH, $ARO, $VII, $CPST, $HALO, $XOMA, $ZIOP
Sniper Trader
24 Nov 14 17:01:03
11/25 WL: $ZIOP - $GSAT - $ARO - $GTI - $XOMA
equities.com
24 Nov 14 16:30:40
Aeropostale Inc. (ARO) Jumps 9.94% on November 24 $ARO http://t.co/5XOolp0gfD
TradeTexasBig
24 Nov 14 14:28:01
$AEO, $ARO , $CROX like the look.. but i am sceptical
Investools
24 Nov 14 14:10:55
Retail came into focus: $ARO, $M, $ANF. $SAM foamed higher on flag breakout. $RUT brought small-caps to the party. http://t.co/8KF0pKPJ7R
Stocks&Blondes
24 Nov 14 14:08:42
@awaldy6 $aro calls $kate calls $mbly call spread but $aro was biggest % mover for me
equities.com
24 Nov 14 13:53:10
Top Services Small-Cap Star for November 24 is Hhgregg Inc. (HGG) $LEE $LEE $WYY $WYY $CIDM $CIDM $ARO $HGG $ARO http://t.co/bOZKGFpUdI
Irma Doucet
24 Nov 14 13:32:35
$ARO Why Aeropostale Inc's Stock Has Crashed 68% in 2014 http://t.co/KzKoZB2Sjd
Thomas Collins
24 Nov 14 13:32:32
$ARO Aeropostale, Inc. To Announce Third Quarter 2014 Earnings Results http://t.co/G0E4t2Sh4R
Awaldy
24 Nov 14 13:14:45
@Stocks_N_Blonds $aro calls?
Leni
24 Nov 14 13:01:50
$ARO 13.01% not too bad
Tweed
24 Nov 14 12:56:47
$ARO breaking through Kumo at eod, NHOD...possible gap up tomorrow. I should have had these options.
Sniper Trader
24 Nov 14 12:31:31
$ARO Here we go!
Day Trade Alerts
24 Nov 14 12:29:17
RT @bangersnpip: $ARO updated chart, not stopped moving today. Predictable given the holiday shopping season? maybe http://t.co/qKcJp9yLg9
Trade Under Ten
24 Nov 14 12:26:32
$ARO updated chart, not stopped moving today. Predictable given the holiday shopping season? maybe http://t.co/qKcJp9yLg9
Robert Mondavi
24 Nov 14 11:58:56
$ARO bouncing off the resistance line of 3.49 twice so far. - Sitting on the Jan 3.0 calls at .30 currently at .60 for a double
Tweed
24 Nov 14 11:55:32
@JohnConaway SMH, sucker $ARO breaking out. Top of cloud at $3.52
Leni
24 Nov 14 11:54:10
$ARO +11.26% Where are my teen retail hater trolls?
Sniper Trader
24 Nov 14 11:52:39
$ARO break that HOD!! Lets go!
US_proptrader
24 Nov 14 11:51:31
$ARO $ECYT $GERN $GFA $ISIS $MAGS $PES $RKUS $WAIR autocharts @ http://t.co/rTnYb8yj59
Day Trade Alerts
24 Nov 14 11:17:46
via #AlertTrade 5-min Candle Alert $ARO - AEROPOSTALE #daytrader #stocks http://t.co/VS8RO1tb5N
Robert Mondavi
24 Nov 14 11:08:03
$ARO hitting about a 2 mo. resistance line at 3.5, somewhat overbought at this level, but could go higher...maybe
US_proptrader
24 Nov 14 10:55:19
$ARO $NBS $SBUX autocharts @ http://t.co/rTnYb8yj59
US_proptrader
24 Nov 14 10:36:17
$ARO $WAIR autocharts @ http://t.co/rTnYb8yj59
Alexander Morris
24 Nov 14 10:18:03
$ARO: 3mRunaway+:3 [+5%,.1%offHi], 0NearHi, allTFs+; TLM:1.6, 1MoHi+, DyVol:1.35M:0.6x:0.4x, DyRng:5.3%:1.1x:1.1x (PotLONG),
US_proptrader
24 Nov 14 10:15:28
$AEGR $ARO $HZNP $MAGS $SD $SFY $VVUS autocharts @ http://t.co/rTnYb8yj59
				
				
By  +Follow August 23, 2013 8:15AM
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