Aeropostale 3Q Profit, Sales Drop Sharply, Outlook Grim

By Retail FOXBusiness

Aeropostale (ARO) revealed late Wednesday much weaker profit and sales over last year and a grim fourth-quarter outlook, sending its shares nearly 2% lower afterhours.

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The teen-apparel company reported net income of $24.11 million, or 30 cents a share, compared with $58.5 million, or 64 cents, a year ago. The results were ahead of average analyst estimates polled by Thomson Reuters of 28 cents.

Revenue for the three months ended Oct. 29 was $596.5 million, down from $602.7 million a year ago, beating the Street’s view of $581 million. Same store sales declined 9%

Total net sales in the company’s e-commerce business increased 19% to $45.7 million from $38.3 million in the year-earlier period.

However, looking toward the fourth quarter, the company predicted earnings in the range of 35 cents to 38 cents a share, which is far below Wall Street’s view of 44 cents, and a sharp drop from 95 cents in the year-earlier period.

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“We are not satisfied with our overall performance, and we remain cautious in our outlook,” Aeropostale CEO Thomas Johnson said.

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The company is making incremental progress on its strategic initiatives by brining “more color and fashion” to its merchandise assortment, while managing inventories and controlling expenses, he said.

Despite persistent unemployment and shaky global markets, the retailer said its near-term focus will be to focus on executing holiday initiatives.

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