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Aeropostale Inc Swings into Q4 Loss, Outlook on Q1 Very Downbeat (ARO)

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Aeropostale Inc. (NYSE: ARO) reported late on Thursday that it swung into a loss in its fiscal fourth quarter and said it expects more headwinds in the current quarter even as the Company looks to update its merchandize.

Shares plunged in afterhours trading.

The New York-based clothing chain, which focuses on consumer segment between 14 to 17 years old, has felt the pinch on its financials lately due to intensifying competition and fast-changing tastes of teenagers. Aeropostale’s CEO Thomas Johnson said on Thursday that company’s performance for the full fiscal year was not up to the mark and warned that fiscal first quarter which stretches from February and April will be a tough one due to stockpile. The Company said that it could not clear its inventories in the holiday season quarter amid challenging macroeconomic environment.

However, the CEO said that the Company was creating new models for its stores and overhauling merchandize in order to gain traction.

For the fiscal fourth quarter ended Feb 2, Aeropostale reported a loss of $671,000 or a penny a share compared to a net income of $26.1 million or 32 cents a share, in the same quarter of last year.

Excluding onetime expenses such as write-downs linked to nonperforming stores, the company posted non-GAAP earnings of 24 cents a share, compared to earnings of 44 cents a share, in the same quarter of last fiscal.

Analysts’ consensus estimate was for earnings of 22 cents a share, according to a data compiled by FactSet Research.

Revenue during the period shrank 1% to $797.7 million from $808.4 million, but beat analysts’ forecast of $779.8 million. During the recently concluded quarter the Company had the benefit of one extra sales week.

Same-store sales, a key gauge on retailer’s performance plunged 9%.

For the current quarter, the Company expects a loss of 15 to 20 cents a share, while analysts were expecting earnings of 8 cents a share.

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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