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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
Stockmarketsvane
19 Dec 14 17:52:04
Swing Sell Picks: $AMX, $ARO, $BTU, $BWA, $CCJ, $CCO.CA, $CLNE, $CS.CA, $FLR, $GGB, $GNW, $IPL.CA, $JEC, $LVS http://t.co/N2He1ky7E8
Awaldy
19 Dec 14 17:46:29
@The_Analyst @biggercapital right and that also shocked me (and was a strategic not a sponsor). Sycamore / $aro is the more usual outcome...
Trader News Daily
19 Dec 14 16:27:08
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
Trading CAT
19 Dec 14 12:49:31
$ARO lots of shorts...
Trading CAT
19 Dec 14 12:45:57
hmm curious move in $ARO
Trading CAT
19 Dec 14 12:22:39
$ARO still has 30% short http://t.co/u3ocCDAFt7
Alexander Morris
19 Dec 14 11:54:32
$ARO: Exc 1DyHIGH=2.35, hits:2, ch:+2.8%, News, 7phNearHi:BrkPLo+PHi[+203.3%], AtgPivH4, 4:2Accel+, tf:0111111, medFlt:59M, HiPctSht[33%:4d]
Zero Filter
19 Dec 14 11:16:12
@tubin_forman So many + changes $ARO / great mgmt back & liquidity not issue can't fathom 33% short interest esp with PE close by #AeroNow
Robert Mondavi
19 Dec 14 11:01:00
$ARO beaten down, possible year end buying?
DayVestor
19 Dec 14 07:55:22
RT @HotStockTeam: Ex-CEO goes after American Apparel $APP, $ARO http://t.co/xZCOwXmkb0
Hot Stock Minute
19 Dec 14 07:52:40
Ex-CEO goes after American Apparel $APP, $ARO http://t.co/xZCOwXmkb0
Rodferd Wire
19 Dec 14 07:00:46
3 Consumer Stocks Ripe for the Next Takeover, by TheStreet http://t.co/3sAPIMuVYy $AEO, $ARO, $EXPR
Zero Filter
19 Dec 14 06:42:24
$ZQK beast-up 55% from call nobody listened to/cared about. May only be getting started as lots '15 + tape bomb potential @jimcramer $ARO
DailyStockPicks
19 Dec 14 00:14:55
$ECIG 400% upside buyout target of $0.50. $200M revenue expected in 2015 $WTW $SRPT $ARO traders read: http://t.co/xi3978GuDs
Chris Kelly
18 Dec 14 20:59:49
RT @deafdaytrader: Past stocks part 2 $WMMVF $SWET $MNZO $BPZ $VLDI $AMD $ZQK $ARO $DAKP $NBS $XUE $XTRN $LQMT $SSN $ORGC $PGN $XCO $VG $CB…
Trader News Daily
18 Dec 14 15:43:01
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
Rodferd Wire
18 Dec 14 12:47:47
3 Consumer Stocks Ripe for the Next Takeover, by TheStreet http://t.co/GImmPpj0cB $AEO, $ARO, $EXPR
Rodferd Editing
18 Dec 14 12:47:47
3 Consumer Stocks Ripe for the Next Takeover, by TheStreet http://t.co/jD8kjOWzjN $AEO, $ARO, $EXPR
Trader News Daily
18 Dec 14 11:11:22
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
Trader News Daily
18 Dec 14 07:05:37
Wow http://t.co/PeRPkZkWiw just posted last weeks results. +429%. Crazy. They offer a free trial too. $EXK $NRTI $ZGNX $WEST $ARO
ProVesting
18 Dec 14 06:40:03
$GPRO $ARO $MGA: Critical Alerts For GoPro, Aeropostale, Magna International, Cliffs ... http://t.co/PrC3VU9kGb http://t.co/DkVQQt0pMP
James DiPlata
18 Dec 14 06:12:12
RT @JulianClose_MIC: Critical Alerts for $GPRO, $ARO, $MGA, $CLF and $ICPT from InvestorsObserver today: http://t.co/E0aq76Mco2 #OptionsTra…
James DiPlata
18 Dec 14 06:12:12
RT @IOOptionsTrades: Critical Alerts for $GPRO, $ARO, $MGA, $CLF and $ICPT from InvestorsObserver today: http://t.co/zW7QWOvYDV #OptionsTra…
Julian Close
18 Dec 14 06:08:28
Critical Alerts for $GPRO, $ARO, $MGA, $CLF and $ICPT from InvestorsObserver today: http://t.co/E0aq76Mco2 #OptionsTrading #CoveredCalls
Investors Observer
18 Dec 14 06:08:28
Critical Alerts for $GPRO, $ARO, $MGA, $CLF and $ICPT from InvestorsObserver today: http://t.co/zW7QWOvYDV #OptionsTrading #CoveredCalls
deafdaytrader
17 Dec 14 16:25:50
Past stocks part 2 $WMMVF $SWET $MNZO $BPZ $VLDI $AMD $ZQK $ARO $DAKP $NBS $XUE $XTRN $LQMT $SSN $ORGC $PGN $XCO $VG $CBK $JE $RFMK $HIMR
DailyStockPicks
17 Dec 14 14:04:36
$ECIG buyout target of $0.50. 400% upside. Positive EBITDA and $200MM revenue in 2015 $WTW $SRPT $ARO traders read: http://t.co/xi3978GuDs
Analyst Ratings
17 Dec 14 10:23:40
Want automatic email alerts for $RY $AEO $ARO $CSCO $KOP? Subscribe to ARN Daily http://t.co/nSJuDtP5Bv
Zero Filter
17 Dec 14 09:04:12
As $ARO further displaces #oldschool logo wear in stores with new #social driven #fastfashion maybe they open store/sell inventory #Cuba ??
Aidzemnig Daid
16 Dec 14 19:20:19
Commented on StockTwits $ARO Will be bankrupt if they don't remove the incompetent board members
Kalliope Bennett
16 Dec 14 17:38:15
RT @urbinarestrepo - Earnings from $ARO $ANF suggest that current conditions in the TeenYoungAdult RetailSpac
Epam Tweet Bot
16 Dec 14 17:19:16
RT @LEGMAKERS: After Hour Gainers / Losers http://t.co/FvnkxXvyYw $CERS, $EWM, $CLNE, $EPAM, $IAG, $CLF, $UWTI, $NGL, $MEG, $ARO http://t.c…
MICHAEL FILLOON
16 Dec 14 17:19:16
After Hour Gainers / Losers http://t.co/FvnkxXvyYw $CERS, $EWM, $CLNE, $EPAM, $IAG, $CLF, $UWTI, $NGL, $MEG, $ARO http://t.co/wQxRXdY2Mr
W T
16 Dec 14 13:48:52
$50 $ARO gift cards are being sold @ 20% off on Amazon... and only half of them have been claimed with a few minutes left. Can't be good.
Liz Dunn
16 Dec 14 10:14:49
Google Annual 'Year in Search' shows blogger/ celeb relationships don't necessarily translate to sales $ARO $CACH http://t.co/L6UOrDkIBs
Trading CAT
16 Dec 14 07:22:39
still watching $ARO slightly trending up last few days http://t.co/J8RV72nD9Z
John Ablemann
16 Dec 14 07:02:11
$ARO Investors Flee Aeropostale After Another Unprofitable Quarter (ARO) http://t.co/uOz0G7vqDG
Zero Filter
16 Dec 14 06:43:24
IF #SycamorePartners truly interested $EXPR &/or $ARO they really going wait till new year when buy dogs likely kick in? $XRT $ZQK $XRT $SPY
Jeffrey Blake
16 Dec 14 06:03:36
$ARO Aeropostale Inc, American Eagle Outfitters, Abercrombie & Fitch Co.: Will ... http://t.co/u1ExoKWVXi
Bob Lang
16 Dec 14 05:47:02
RT @StaceyRetail: our take on price changes in UK at @HollisterCo is out today for #SWRetailAdvisors clients $ANF $AEO $ARO
Stacey Widlitz
16 Dec 14 05:45:04
our take on price changes in UK at @HollisterCo is out today for #SWRetailAdvisors clients $ANF $AEO $ARO
deafdaytrader
15 Dec 14 14:29:28
Past stocks might go $LBSR $MNZO $NAMG $VLDI $RGSE $ZQK $ARO $HGSH $DAKP $AEMD $LIBE $DIGP $SPBU $HNSN $AVEO $LVGI $SMAA $TSOI $LFAP $TRVN
US_proptrader
15 Dec 14 11:33:25
$ARO $CCXI $OAS $ZQK autocharts @ http://t.co/rTnYb8yj59
InvestorPlace
15 Dec 14 10:55:28
5 Retail Stocks in Serious Trouble. $RSH $ANF $FRAN $ARO $SHLD http://t.co/La0i0vLyux
US_proptrader
15 Dec 14 10:36:27
$ARO $NAVB $SSTK $TLM $W autocharts @ http://t.co/rTnYb8yj59
Dr. Duru
15 Dec 14 10:29:55
And amid today's rapid sell-offs, "TEEN RETAILERS" of all things are showing relative strength! $ZQK $FRAN $ARO $AEO $EXPR $URBN $BKE
Alexander Morris
15 Dec 14 08:27:03
$ARO: Waterfall-:1 [-1%,5.2%offHi], phNearOp:BrkPHi+PLo[-5.0%], AtgPivL3, 21:3Accel-Dy, tf:0111111; TLM:1.7, DyVol:762T:0.3x:0.1x,
Daily Contracts
15 Dec 14 08:08:00
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/FqjcZjvBSB
US_proptrader
15 Dec 14 07:28:36
$AG $ARO $CDE $CLF $FTR $HGSH $IAG $JCP $TLM autocharts @ http://t.co/rTnYb8yj59
OptionCast
15 Dec 14 06:37:04
Short Squeeze Alerts $EOX $GDP $PVA $NES $ECPG $GBX $SZYM $VVUS $ARO http://t.co/UrAj7j0U90
				
				
By  +Follow August 23, 2013 8:15AM
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