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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
Business Updates
12 Jul 14 20:04:32
$ARO: AEROPOSTALE INC Files SEC form 8-K, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Results of http://t.co/6cgCfa1HW8
Trader News Daily
12 Jul 14 19:34:13
http://t.co/PeRPkYMi8s members made over 250% this week. Sign up free! Related: $DIDG $FINW $GOL $PEIID $GERN $ARO $TNIB $NTEK $LYG $GERS
Paul McIntosh
12 Jul 14 04:44:40
$ARO No Signs of improvement. Bearish descending continuation triangle confirmed. http://t.co/Gl6ZsYI9Sa
oops
11 Jul 14 19:25:28
@jimcramer hey Jim I wonder if $ARO beats $RSH to zero ...?
Colin Macleod
11 Jul 14 18:49:42
July 11 2014 Stocks Hitting New Lows http://t.co/2KlEol3fbP $NEWL $PT $CTT $ARO $BAA $PVH $ALLY $REXX $CNHI $AEGR $IVAN $PNRA
$Stocknewsalerts
11 Jul 14 14:16:35
$ARO ALERT: New Aeropostale, Inc. SEC Filing From our Stock News Alerts App
StockNews
11 Jul 14 14:13:16
$ARO - Termination of Registration of a Class of Security Under Section 12(b) (15-12b) http://t.co/EYzVPj1M3E
VisualStock Resource
11 Jul 14 14:13:13
$ARO - Termination of Registration of a Class of Security Under Section 12(b) (15-12b) http://t.co/AlHdm2CfGG
Peter George Psaras
11 Jul 14 12:04:10
Weekly Summary : Retailers Are Struggling $LL $COH $ARO $APP $FAST $WDFC $HELE $WMT http://t.co/Bg0X1MROi4
Steven
11 Jul 14 11:41:26
RT @nanexllc: At least 527,000 shares traded in $ARO yesterday was a sham http://t.co/YcQmUeX4pn
nobullshytrader
11 Jul 14 09:11:06
$ARO no bottom
Financial Headlines
11 Jul 14 08:04:33
$ARO: News Review: Aeropostale Inc (ARO), Yingli Green Energy Hold. Co. Ltd. (ADR ... http://t.co/m8edsOM1RL
rockhowse
11 Jul 14 07:54:27
RT @nanexllc: At least 527,000 shares traded in $ARO yesterday was a sham http://t.co/YcQmUeX4pn
Eric Scott Hunsader
11 Jul 14 07:48:37
At least 527,000 shares traded in $ARO yesterday was a sham http://t.co/YcQmUeX4pn
Peter George Psaras
11 Jul 14 07:15:03
Lumber Liquidators: The First Of Many Retailers To Disappoint $APP $ARO $COH $FAST $GPS $HELE $LL $RCII $WDFC http://t.co/BKjHqpE6qf
Peter George Psaras
11 Jul 14 07:14:47
Lumber Liquidators: The First Of Many Retailers To Disappoint $APP $ARO $COH $FAST $GPS $HELE $LL $RCII $WDFC http://t.co/f7eQ7WpqnW
Peter George Psaras
11 Jul 14 07:10:15
Lumber Liquidators: The First Of Many Retailers To Disappoint This Quarter $LL $COH $ARO $RCII $FAST $GPS $APP $HE... http://t.co/vEohKzmxlX
TalkMarkets
11 Jul 14 07:10:15
Lumber Liquidators: The First Of Many Retailers To Disappoint This Quarter $LL $COH $ARO $RCII $FAST $GPS $APP $HE... http://t.co/CEIo0Ry97H
Business Reports
10 Jul 14 22:40:45
$ARO: Zumiez rallies after raising second quarter outlook http://t.co/ZEpNBV96W8
SNN Team
10 Jul 14 22:38:13
$ARO - Zumiez rallies after raising second quarter outlook -> http://t.co/BHfgEKD49w #stock #stocks #stockaction
Trader News Daily
10 Jul 14 22:14:56
http://t.co/PeRPkYMi8s helps increase portfolios by over 100%. Sign up free. Related: $ARO $WEN $YGE $BRCD $IACH $TC $DRYS $MUX $HMY $CXDC
Wall Street Monitor
10 Jul 14 22:05:45
$ARO: 10 Brands likely to disappear in 2015 http://t.co/7cglYZyQa4
Stock News 24
10 Jul 14 22:04:26
$ARO - 10 Brands likely to disappear in 2015 -> http://t.co/cDafiD9GoW #stock #stocks #stockaction
Nikolai Kondratiev
10 Jul 14 21:00:31
@awaldy6 Hard to opine on fickle tastes of American teen. @Hedge_FundGirl has been right, core demographic of $ARO hasn't rebounded.
TickerChirp
10 Jul 14 20:05:05
Trending Tweets Related to $ARO on 07/11/2014 http://t.co/00W4fOIw6k
Market Updates
10 Jul 14 20:04:34
$ARO: Aeropostale: Set To Benefit From Sycamore's Expertise And Capital http://t.co/HTtegyYn2G
Adam Walder
10 Jul 14 19:19:12
@NKondratiev are you still long $aro? Like the rebranding, think they're cutting out logo in one last fell swoop. $zumz encouraging too
Fund4People
10 Jul 14 19:18:41
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Colin Macleod
10 Jul 14 17:33:05
July 10 Stocks Free-Falling to New Lows on this Barn Burner Morning http://t.co/EFeg8gY9qf $MCP $LL $OIBR $TSCO $BAA $PT $MBI $ARO $DB $CA
ataraxia
10 Jul 14 17:00:25
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Roger Raymond
10 Jul 14 16:22:04
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Stock Signaling
10 Jul 14 16:01:10
After Hours Price Advances: $OMER $DB $BLUE $SDRL $WB $AGN $ARO $MDT $NG $ICE $LTS $TSRO $SGMO $ARWR $ISIS http://t.co/3gvJLENZtD #nyse #spy
rockhowse
10 Jul 14 15:47:12
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Chris
10 Jul 14 15:36:21
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
SKYNET FUTURES
10 Jul 14 15:27:27
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Media Sentiment
10 Jul 14 15:18:15
$ARO received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 443
Daniel
10 Jul 14 15:18:03
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
pɐuɹɐʞ uɐɹıʞ
10 Jul 14 15:17:40
RT @nanexllc: 1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
Eric Scott Hunsader
10 Jul 14 15:15:59
1/2 million shares traded in $ARO were obviously illegal wash sales: http://t.co/KTbn7aoS61
$Stocknewsalerts
10 Jul 14 14:27:10
$ARO ALERT: New Aeropostale, Inc. SEC Filing From our Stock News Alerts App
StockNews
10 Jul 14 14:22:11
$ARO - Statement of Changes in Beneficial Ownership (4) http://t.co/ichxOgvpt2
VisualStock Resource
10 Jul 14 14:22:07
$ARO - Statement of Changes in Beneficial Ownership (4) http://t.co/gcggqTGcO5
Daily Contracts
10 Jul 14 11:24:04
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/VznHyqxvbl
Companies in News
10 Jul 14 11:04:33
$ARO: Morning Buzz: Groupon Inc (NYSE:GRPN), Aeropostale Inc (NYSE:ARO), Local ... http://t.co/kvT9obROdN
Daily Contracts
10 Jul 14 10:49:10
Real-Time feed of company contracts, original agreements and executive updates from Aéropostale $ARO http://t.co/VznHyqxvbl
Brattle St. Capital
10 Jul 14 10:45:25
100%“@crowdturtle: I really would like to make a pure contrarian long-term call option investment in $aro But I need one reason. Just one."
crowdturtle
10 Jul 14 10:43:34
I really would like to make a purely contrarian long-term call option investment in $aro But I need one reason. Just one.
crowdturtle
10 Jul 14 10:26:25
Is there even one good thing happening with $aro Aeropostale? Seems like the entire business is hemorraging. Core is broken.
The Manual of Ideas
10 Jul 14 09:28:14
Time to revisit Aeropostale? Down almost 90% from its high, with no debt on the balance sheet. Losing money but should find a way out. $ARO
The Fly
10 Jul 14 08:18:27
$ZUMZ $PSUN $URBN $ARO $AEO Zumiez rallies after raising second quarter outlook: Full Story http://t.co/GzE3HwEccb
				
				
By  +Follow August 23, 2013 8:15AM
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