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Aeropostale Losses Accelerate, Closing More Stores

By  +Follow August 23, 2013 8:15AM
Tickers Mentioned:

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
US Banking News
27 Aug 14 11:57:56
Aeropostale Shares Gap Up After Insider Buying Activity $ARO http://t.co/ZKZWBR88TE
tanvir ahmed
27 Aug 14 11:57:22
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Sleek Money
27 Aug 14 11:49:24
Aeropostale Shares Gap Up After Insider Buying Activity $ARO http://t.co/lYHPlKFTe7
Trader News Daily
27 Aug 14 11:26:19
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rikki lee
27 Aug 14 10:42:59
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tanvir ahmed
27 Aug 14 10:18:19
$ARO long here at 4.09
Media Sentiment
27 Aug 14 10:13:07
$ARO received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 274
27 Aug 14 10:12:23
$ARO nice breakout today... updated chart http://t.co/nfDe9sJoAc
Stock News Guru
27 Aug 14 10:04:45
$ARO: Most Active Stocks Coverage: Merck & Co., Inc. (NYSE:MRK), Aeropostale Inc ... http://t.co/vRI7ap2vyk http://t.co/JytPTVyMUc
TheStreet Alerts
27 Aug 14 10:02:20
Aeropostale $ARO Stock Gains on Heavy Trading Volume http://t.co/8UHhAyxjuN
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Brattle St. Capital
27 Aug 14 09:49:46
$ARO now trading above where it was prior to horrific 3Q guide-down last Thurs. Um, what
27 Aug 14 09:36:54
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BNK Invest
27 Aug 14 09:32:14
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James P Worthy
27 Aug 14 09:30:23
$ARO Aeropostale Inc. (ARO) is the Early Big Gainer for Small-Cap Stars Services ... http://t.co/e3RmrRiH97
27 Aug 14 09:30:22
Rex American Resources (REX) Leads Small-Cap Stars in Early Trading for August 27 $galt $ARO $mpaa $GALE $REX http://t.co/TWnwMkDuJ1
Peter Bardens
27 Aug 14 09:30:21
$ARO Aeropostale Rehires Geiger as CEO Amid Sales Slump http://t.co/VHEMd3vD59
27 Aug 14 09:29:20
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Investors Hangout
27 Aug 14 09:22:48
danrocks: $ARO On Alert $PBR $C $SVLT $KMI $HPJ http://t.co/yZf2160HZc
Investors Hangout
27 Aug 14 09:22:48
danrocks: $ARO On Alert $PBR $C $SVLT $KMI $HPJ http://t.co/vguGDSuXMK
27 Aug 14 09:17:40
$XLI Showing on my streamers $DGLY $MBLY $ONVO $AVEO $ARO http://t.co/hRkRjjA3Pr
27 Aug 14 09:10:32
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Financial Headlines
27 Aug 14 09:04:45
$ARO: Update: Aeropostale's Earnings (ARO) http://t.co/JAADAJxljm http://t.co/5p4lq2pSVE
27 Aug 14 08:55:42
$ARO 9,95% $ANF 0,18% con balance mañana en el premkt $WFM 2,69%
27 Aug 14 08:53:38
Smallcap #Stocks Performance $RSH $KWK $REX $EXPR $UNIS $BODY $GALE $ARO $RCII $ACLS $CLUB $KIOR $TEAR more@ http://t.co/Giravo3fg9
Investors Hangout
27 Aug 14 08:51:51
lookn4wins: $ARO Current Price $ARO Most recent stock chart http://t.co/3frQG8Cqx9
Investors Hangout
27 Aug 14 08:51:48
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Extreme Stocks
27 Aug 14 08:39:52
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Wealth 101
27 Aug 14 08:29:34
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Salese Trades
27 Aug 14 08:28:56
"@PENNYCHATS: $ARO is up as well, must be because the back to school, one of my followers were right about $BEBE as well." #StockGod #Jk
27 Aug 14 08:28:30
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27 Aug 14 08:27:05
$ARO $ENPH $GWPH $TKMR autocharts @ http://t.co/hj7PGeTQk3
VisualStock Resource
27 Aug 14 08:26:31
$ARO up 9.96% recently! Choose your Guru and learn how to trade! http://t.co/ZtEaHdqpmu (Superman or Nathan Michaud) I subscribe!
27 Aug 14 08:24:09
Got into $Aro at $3.18 a few weeks ago. Trading above $4.2 today. Will be a $6 stock next year. Gaining popularity back with changes
A new yorker in BA
27 Aug 14 08:22:01
$ARO, $DDD y $PBR son los responsables de mi sonrisa del día de la fecha.
27 Aug 14 08:21:55
little angy with myself for not taking any profits in $nflx but still having a nice day with $ARO
Stock Headlines
27 Aug 14 08:04:41
$ARO: Aeropostale slumps on 2Q loss and 3Q outlook http://t.co/n5q3ZGZUJw http://t.co/XxzeUTecIN
EPS Trader
27 Aug 14 08:01:15
$ARO is breaking out above $4.06 with positive earnings and a target of $4.62.
Stocks to Buy
27 Aug 14 07:59:00
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A new yorker in BA
27 Aug 14 07:53:14
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Sniper Trader
27 Aug 14 07:49:23
$ARO dont look now, but its up 10%
27 Aug 14 07:48:43
out of $aro @ 4.19 +.15 on the trade
27 Aug 14 07:47:25
$ARO up and running away! Called the buy under 3.75, now trading 4.15
27 Aug 14 07:41:51
Dipping toes in $ARO
The Skeptic
27 Aug 14 07:34:42
Hard to believe $ARO is still down about ~70% from a year ago.
Financial Advise
27 Aug 14 07:32:08
#stocks Aeropostale $ARO and American Eagle $AEO are both bouncing back nicely. Love getting beaten up retailers really cheap.
27 Aug 14 07:30:40
$XLI Industrial Select Sector SPDR (XLI) 54.17 -0.01 (-0.02%) $ARO $USLV $BAC http://t.co/otiUUdwycF
27 Aug 14 07:28:21
$ARO Aeropostale has finally broken out from it's basing pattern. This can offer a lot of upside http://t.co/K5xRuYsOgm
By  +Follow August 23, 2013 8:15AM



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