Aeropostale Posts Loss for Eighth Straight Quarter

Earnings Reuters

Teen apparel retailer Aeropostale Inc (ARO) reported its eight straight quarterly loss, hurt by an 11 percent fall in same-store sales as lower mall traffic, higher discounts and falling demand continued to weigh on results.

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The company also forecast a bigger-than-expected fourth-quarter loss, sending its shares plunging 7.8 percent in extended trade.

Traditional retailers in North America have been forced to slash prices to fight off intense competition and try to win back shoppers who increasingly prefer shopping online.

Rival Abercrombie & Fitch Co also reported disappointing quarterly results earlier on Wednesday and cut its full-year profit forecast.

Apart from failing to address its weakness in the online arena, Aeropostale is struggling to keep pace with changing trends and attract its mostly teen customers, who are cutting back on spending amid a weak job market and low wage growth.

Like other teen apparel retailers, the company has also been losing out to fast-fashion brands such as H&M, Forever 21 and Inditex's Zara, which bring the latest styles from the runway to their stores within weeks.

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Comparable store sales at Aeropostale have now fallen for nine quarters in a row.

Same-store sales fell in the mid-teens in percentage terms over Thanksgiving and the Black Friday weekend, in contrast with November's low single-digit percentage increase, the company said in a conference call on Wednesday.

Aeropostale's net loss widened to $52.3 million, or 66 cents per share, in the third quarter ended Nov. 1, from $25.6 million, or 33 cents per share, a year earlier.

The company said it expected to record a loss of between 37-44 cents in the fourth quarter, bigger than analysts' expectations of a loss of 36 cents per share.

Revenue fell to $452.9 million from $514.9 million a year ago.

Excluding items, Aeropostale reported a loss of 45 cents per share, in line with the average analyst estimate.

Up to Wednesday's close, the stock had fallen nearly 65 percent this year.

(Reporting by Ramkumar Iyer and Nayan Das in Bengaluru; Editing by Simon Jennings)