Aeropostale's loss widened in its most recent quarter as sales fell, and the teen retailer's forecast for the holiday shopping season mostly fell short of analysts' prediction.
The New York-based company said Wednesday that it expects a loss of 37 to 44 cents per share for the period that runs through January. Analysts surveyed by FactSet predicted a 37-cent loss. The holiday shopping period is a crucial time of year for retailers, as it accounts for about 20 percent of the retail industry's annual sales.
That would follow Aeropostale's loss of $52.3 million, or 66 cents per share, for its fiscal third quarter, worse than a loss of $25.6 million, or 33 cents per share, in the same period last year. Adjusted to exclude one-time items, this quarter's loss came to 45 cents per share, matching Wall Street's prediction.
Shares of Aeropostale fell 7.8 percent to $2.94 in after-hours trading. The stock has dropped 65 percent this year.
Teen retailers have been struggling with changing fashion tastes among teens and fewer shoppers in the mall. They face intense competition from fast-fashion retailers like Forever 21 and H&M, which offer a wide and quickly changing array of clothing at low costs.
Competitor Abercrombie & Fitch is also struggling, reporting earlier Wednesday that its sales fell in its most recent quarter and lowering its earnings forecast for the year.
Aeropostale is trying to improve its merchandising, marketing and taking other steps to improve its profitability. But the company is still dealing with weak demand.
Its revenue from its websites and stores open at least a year, a key measure of a retailer's performance, fell 11 percent in the third quarter. Overall sales fell 12 percent to $452.9 million. Analysts expected $445.6 million, according to Zacks Investment Research.
Elements of the story were generated by Automated Insights using data from Zacks Investment Research. ARO stock research report from Zacks.