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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
Robert Mondavi
21 Nov 14 07:15:43
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21 Nov 14 07:11:16
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21 Nov 14 06:13:45
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Investors Observer
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21 Nov 14 06:11:34
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21 Nov 14 04:45:42
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21 Nov 14 03:55:29
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20 Nov 14 20:05:51
ARO 3.19 Aeropostale Inc Stock Charts $ARO Last Updated: 11/20/14 Last price: 3.19 Total volume: 2,114,937 ARO http://t.co/A2qpTZR3ZM
chartguy89
20 Nov 14 20:05:35
$ARO ARO 3.19 Aeropostale Inc Stock Charts $ARO Last Updated: 11/20/14 Last price: 3.19 Total volume: 2,114,937 ARO http://t.co/7XLAw15lxd
Jake13
20 Nov 14 19:59:50
ARO Year to date has changed -64.91% percent. +8.87% in the last 30 days. $ARO Aeropostale Inc Full breakdown http://t.co/Y9uYYrT5e9
Jake13
20 Nov 14 19:59:28
$ARO ARO Year to date has changed -64.91% percent. +8.87% in the last 30 days. $ARO Aeropostale Inc Full breakdown http://t.co/vhid49Hy77
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20 Nov 14 17:42:24
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20 Nov 14 16:03:16
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Sniper Trader
20 Nov 14 15:27:54
11/21 WL: $FWM - $PHMD - $ACI - $REN - $ARO - $PWE
equities.com
20 Nov 14 14:59:34
Aeropostale Inc. (ARO) Jumps 6.69% on November 20 $ARO http://t.co/C8ufNP8kWL
NelsNYC
20 Nov 14 12:59:31
RT @TweetLeni: $ARO 2% woohoo #bottomfeeder
JPU
20 Nov 14 12:59:08
$ARO 7,02% $URBN 7,06% $AEO 3,77% $ANF 3,02%
Leni
20 Nov 14 12:59:00
$ARO 2% woohoo #bottomfeeder
Robert Mondavi
20 Nov 14 12:52:54
$ARO at resistance...let's see if it can break out
Stocks&Blondes
20 Nov 14 12:51:25
Taking off small part of my $aro today on this 7% daily move. Will look to add it back when the shorts pile back in
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20 Nov 14 12:09:01
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/FqjcZjvBSB
JPU
20 Nov 14 12:08:52
$ARO 5,2%
danrocks
20 Nov 14 11:15:19
Right now ARO is number 230 for the largest percentage gain out of 250 stocks. $ARO ARO is up +5.23% in the la http://t.co/YJeVjwvupt
danrocks
20 Nov 14 11:14:57
$ARO Right now ARO is number 230 for the largest percentage gain out of 250 stocks. $ARO ARO is up +5.23% in the la http://t.co/YuGR0WA7pq
Zero Filter
20 Nov 14 09:40:35
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20 Nov 14 09:00:04
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Robert Mondavi
20 Nov 14 08:32:52
$ARO trying to breakout
Robert Mondavi
20 Nov 14 06:58:19
$ARO vol spikes, chart looks primed for a move...on watch
4-traders.com
19 Nov 14 13:05:09
Aeropostale : To Announce Third Quarter 2014 Earnings Results http://t.co/rBKeCPeKVv $ARO
$Stocknewsalerts
19 Nov 14 13:04:28
$ARO Aeropostale, Inc. To Announce Third Quarter 2014 Earnings Results From our Stock News Alerts App
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19 Nov 14 13:03:39
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19 Nov 14 13:03:32
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19 Nov 14 13:03:20
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19 Nov 14 13:03:11
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19 Nov 14 09:04:27
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James P Worthy
19 Nov 14 08:32:08
$ARO Aeropostale Has Substantial Upside Potential (ARO) http://t.co/cn6TSZwNWI
Zero Filter
19 Nov 14 07:43:27
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MikeThaMagi
19 Nov 14 06:56:05
Looks like Aeropostle is gonna go outa business praise God. $ARO Sad for the employees though.
MikeThaMagi
19 Nov 14 06:53:29
RT @StockTwits: It's been a terrible year for teen retailers: $ANF -12% $URBN -24% $PSUN -55% $ARO -66% http://t.co/V6hNcWgNfI
Stocks&Blondes
19 Nov 14 05:06:50
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19 Nov 14 04:33:15
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19 Nov 14 04:33:15
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Zero Filter
19 Nov 14 03:15:54
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Seeking Alpha - All
18 Nov 14 23:11:17
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le operateur
18 Nov 14 20:38:21
Dumpster Diving: left 4 dead $ARO getting close to #VSB also #KCBB so maybe it goes. It needs to get VSB & get above all MA's; 3.25. Or not.
Penny Stock Secret
18 Nov 14 19:14:33
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Ryan Mallory
18 Nov 14 16:20:50
RT @howardlindzon: Millenials !!! @StockTwits: It's been a terrible year for teen retailers $ANF -12% $URBN -24% $PSUN -55% $ARO -66% htt…
howardlindzon
18 Nov 14 15:25:07
Millenials !!! @StockTwits: It's been a terrible year for teen retailers $ANF -12% $URBN -24% $PSUN -55% $ARO -66% http://t.co/DrQq21qrC0
				
				
By  +Follow August 23, 2013 8:15AM
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