Aeropostale Q1 Loss Widens as Sales Slump

AeropostaleNew York–Shares of Aeropostale Inc. sank to their lowest level in months after the beleaguered teen retail reported Thursday a widened first quarter loss and sales slump. Moreover, the second quarter forecast was equally dismal.

Aeropostale’s first quarter net loss widened to $76.8 million, or 98 cents a share, from $12.2 million or 16 cents a share last year. Adjusted loss, which excludes special items, was $41.1 million or 52 cents a share. Analysts’ average estimate expected a loss of 72 cents a share.

‘Aggressive Promotions’

Net sales decreased 12% to $395.9 million from $452.3 million last year, missing analysts’ consensus for $410.04 million in sales.
Comparable store sales, including e-commerce, decreased 13% compared to a decrease of 14% last year.

Gross margin dropped significantly to 17.8% from 22.4% last year.

The company closed 18 Aeropostale stores during the quarter and one P.S. from Aeropostale store.

CEO Thomas Johnson said, “As other retailers experienced, the macroeconomic environment was challenging during the first quarter with aggressive promotions, lower mall traffic, and unseasonable weather. While our overall results were disappointing, we were able to exceed guidance and end the quarter with inventories well-controlled.”

Looking ahead to the second quarter, the company expects to post a loss of 55 to 61 cents a share. Analysts currently expect second-quarter loss of 50 cents share.

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology.