Published March 14, 2013
Aeropostale (ARO) revealed a fourth-quarter loss on Thursday amid impairment charges and an 8% slump in same-store sales and the apparel maker also warned of more red ink to come due to a “weak macroeconomic environment.”
Wall Street punished the retailer for the weaker-than-anticipated first-quarter guidance, sending its shares sinking more than 6% in after-hours action.
The company said it lost $700,000, or 1 cent a share, last quarter, compared with a profit of $26.1 million, or 32 cents a share, a year earlier.
On an adjusted basis, Aeropostale said it earned 24 cents a share, compared with a profit of 44 cents a share a year earlier. Analysts had been calling for EPS of 22 cents
Net sales slid 1% to $797.7 million, topping the Street’s view of $775.7 million.
However, same-store sales, including e-commerce revenue, fell 8% in the quarter, compared with a 7% slide in the year-earlier period. Aeropostale said e-commerce sales jumped 16% year-over-year.
Excluding online sales, same-store sales tumbled 9%, matching the slide in the fourth quarter of 2011.
Aeropostale’s net loss was driven by store asset impairment charges of $19.7 million, or 25 cents a share.
Aeropostale CEO Thomas Johnson acknowledged the results were “disappointing,” but noted progress on “strategic initiatives,” including adding new talent and developing a next-generation store model.
“While we have not reached the level and consistency in our performance for which we strive, we are committed to evolving and transforming our product to position ourselves as a true lifestyle brand,” Johnson said in a statement.
Looking ahead, Aeropostale projected a first-quarter loss of 15 cents to 20 cents a share, compared with EPS of 13 cents a year earlier and estimates from analysts for a profit of 8 cents.
"We anticipate a challenging first quarter as a result of expected margin pressures from holiday carryover inventory, and the impact of a weak macroeconomic environment,” Johnson said.
Shares of New York-based Aeropostale dropped 6.27% to $13.60 in after-hours action, putting them on track to slash their 2013 rally of 11.5%.