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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
chartguy89
27 Feb 15 20:38:31
ARO 4.03 Aeropostale Inc Stock Charts $ARO Last Updated: 02/27/15 Last price: 4.03 Total volume: 1,325,290 ARO http://t.co/NltbCQFRHA
chartguy89
27 Feb 15 20:38:16
$ARO ARO 4.03 Aeropostale Inc Stock Charts $ARO Last Updated: 02/27/15 Last price: 4.03 Total volume: 1,325,290 ARO http://t.co/GCS9i37Hly
Jake13
27 Feb 15 20:37:21
ARO Year to date has changed +73.71% percent. +47.62% in the last 30 days. $ARO Aeropostale Inc Full breakdown http://t.co/bvF8M78ePO
Jake13
27 Feb 15 20:36:59
$ARO ARO Stock year to date has changed +73.71% percent. +47.62% in the last 30 days. $ARO Aeropostale Inc Full bre http://t.co/RkALvHFEq1
Greg David
27 Feb 15 17:15:41
http://t.co/RMvVXnJDpv does trade alerts differently than anyone else. Its super cool. $PTRC $LXRX $NYMT $ARO $EXRC
TALENTEDBLONDE
27 Feb 15 13:37:22
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Zero Filter
27 Feb 15 12:34:35
$ARO up > 80% from DEC when countless pundits - blind or #oblivious power #AeroNow strategy - jested at total demise $XRT $AEO $JWN
TweetMeMaybe
27 Feb 15 12:21:01
$ARO Hola! Holding above $4
Zero Filter
27 Feb 15 10:57:47
This endless $ARO toying with $4 a joke or what ? $XRT $AEO $JCP #SycamorePartners #AeroNow @optionmonster
Jenna Espinoza
27 Feb 15 09:15:35
Commented on StockTwits $ARO Will be bankrupt if they don't remove the incompetent board members
Stock Rocket
27 Feb 15 08:42:41
Check out http://t.co/5jbX6lWXsj. They have a cool and different way of doing trade alerts. Pretty cool. $MNKD $LNCO $AGEN $SID $ARO $RSH
Trader News Daily
27 Feb 15 08:24:02
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BreakingStocksNews
27 Feb 15 05:46:04
$ARO $NFLX: Services Stocks with Best YTD Returns: Aeropostale Inc (NYSE:ARO ...: http://t.co/u047L8TV8i
bored2tears
27 Feb 15 05:44:05
"How many ways can you slice and dice a hoodie?" Once-popular stores fall out of favor with teens. http://t.co/mdck1MXF2G $ANF $ARO #retail
Rahul Sharma
27 Feb 15 05:18:20
@Slicyman That I agree. Although there does seem to be a rising tide as serial under-performers like $KSS $LOW $ARO & $CHS show...
Sherri Contreras
27 Feb 15 04:23:09
Commented on StockTwits $ARO Will be bankrupt if they don't remove the incompetent board members
ProVesting
27 Feb 15 03:46:05
$ARO: Services Stocks Watch List-Aeropostale (ARO), Alaska Air (ALK ...: http://t.co/TK5itAqT6K
chartguy89
26 Feb 15 20:31:13
ARO 3.91 Aeropostale Inc Stock Charts $ARO Last Updated: 02/26/15 Last price: 3.91 Total volume: 1,248,977 ARO http://t.co/j6bGMLuhOl
chartguy89
26 Feb 15 20:30:57
$ARO ARO 3.91 Aeropostale Inc Stock Charts $ARO Last Updated: 02/26/15 Last price: 3.91 Total volume: 1,248,977 ARO http://t.co/QIK9KIzeo9
Jake13
26 Feb 15 20:28:42
ARO Year to date has changed +68.53% percent. +40.14% in the last 30 days. $ARO Aeropostale Inc Full breakdown http://t.co/ecM8Te8NZk
Jake13
26 Feb 15 20:28:20
$ARO ARO Stock year to date has changed +68.53% percent. +40.14% in the last 30 days. $ARO Aeropostale Inc Full bre http://t.co/emxL1QnPCF
MLB
26 Feb 15 15:27:34
@jimcramer which do you like more American Eagle or $ARO
MLB
26 Feb 15 15:24:24
@jimcramer is $ARO a buy?
MLB
26 Feb 15 14:56:30
@jimcramer opinion on $ARO buy or sell?
StockNewsWires
26 Feb 15 13:47:01
$GPS $SF $ARO: Gap Quarterly Profit Exceeds Estimates as Old Navy Boosts Sales: http://t.co/ekXY1IArSg
Trader News Daily
26 Feb 15 13:00:24
Wow http://t.co/PeRPkYu8Uk just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
TALENTEDBLONDE
26 Feb 15 11:51:09
Why Teens Stopped Shopping at $ANF http://t.co/37u7ZZg1vd Via @LydiaBreakfast $urbn $ARO
PennyStocker
26 Feb 15 10:52:31
Wow the last pick from http://t.co/p3LC54H2W5 popped over 450%. Nice for being free. $EOX $ARO $SONS $BHRT
JC
26 Feb 15 10:10:28
Sold $ARO at 3.99 from 3.35 entry for 16% profit.
TweetMeMaybe
26 Feb 15 10:02:17
$ARO Aeropostale $4 BOOOM
Greg David
26 Feb 15 09:42:16
http://t.co/RMvVXnJDpv does trade alerts differently than anyone else. Its super cool. $PTRC $LXRX $NYMT $ARO $EXRC
Mark Trader
26 Feb 15 08:12:51
The last http://t.co/8hGh2pxMWQ alert popped over 400%. So sweet and free to sign up. $ARO $PKD $SALT $PPP $COTE $LF $NAVB
#HelpYouGetGAINS
26 Feb 15 07:45:52
#Stocks to watch from The Value Line Investment Survey: $KO $HOT $WYN $CVS $SAVE $REGN $ARO $URBN $TAP $DF http://t.co/a5uSweOmf1
Traderinvestor
26 Feb 15 06:44:26
Some down stocks on my watch list $SEAS $LULU $HALO $INVE $ARO
Breaking News
26 Feb 15 03:44:09
$ARO: Analyst Rating Update on Aeropostale Inc: http://t.co/De45WZOtad
Breaking News
26 Feb 15 03:43:13
$ARO: Analyst Rating Update on Aeropostale Inc: http://t.co/Gc4hXaMCR8
ProVesting
26 Feb 15 03:41:02
$ARO: Analyst Rating Update on Aeropostale Inc: http://t.co/R9GUlZjVBi
Pzaa...Guy
26 Feb 15 02:45:14
$ARO - Aropostale: Market Misunderstanding Of Direction - Unjustified Rally Indicates Large Downside http://t.co/2TM4XzWNqM
Kubilay Nacak
26 Feb 15 02:45:13
$ARO - Aéropostale: Market Misunderstanding Of Direction - Unjustified Rally Indicates Large Downside http://t.co/ecsslWVmVm
StockNews
26 Feb 15 02:45:12
$ARO - Aéropostale: Market Misunderstanding Of Direction - Unjustified Rally Indicates Large Downside http://t.co/IbyRyB0yBS
NASDAQ
26 Feb 15 02:45:10
$ARO - Aéropostale: Market Misunderstanding Of Direction - Unjustified Rally Indicates Large Downside http://t.co/44mRaqGVC0
Stocks News&Markets
26 Feb 15 02:45:08
$ARO - Aéropostale: Market Misunderstanding Of Direction - Unjustified Rally Indicates Large Downside http://t.co/sNaSBK5FEN
Donut Shorts
25 Feb 15 21:29:32
@MaglanCapital the collar just got a little tighter at $ARO
Trader News Daily
25 Feb 15 18:31:46
Wow http://t.co/PeRPkYu8Uk just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
Christien
25 Feb 15 16:41:42
RT @TALENTEDBLONDE: Abercrombie & Fitch: Why Teens Shunned the Moose: $ANF $URBN $ARO $AEO  via @LydiaBreakfast  http://t.co/xk0pS9Wnuv
TALENTEDBLONDE
25 Feb 15 16:37:46
Abercrombie & Fitch: Why Teens Shunned the Moose: $ANF $URBN $ARO $AEO  via @LydiaBreakfast  http://t.co/xk0pS9Wnuv
Mark Trader
25 Feb 15 14:53:07
The last http://t.co/8hGh2pxMWQ alert popped over 400%. So sweet and free to sign up. $ARO $PKD $SALT $PPP $COTE $LF $NAVB
Trader News Daily
25 Feb 15 12:32:26
Wow http://t.co/PeRPkYLKiU just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
BNK Invest
25 Feb 15 12:26:58
$ARO Insiders vs. Shorts #stocks http://t.co/WInMomKzIC
Trefis.com
25 Feb 15 10:10:29
Gap Earnings Preview: Revenues To Increase Steadily Despite Traffic Decline; Omni-Ch... http://t.co/lJffi3mVNs by Trefis Team $GPS $AEO $ARO
				
				
By  +Follow August 23, 2013 8:15AM
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