By Tess Stynes
Aéropostale Inc. projected a per-share loss for the critical
holiday-shopping quarter that was wider than analysts feared,
sending the struggling teen apparel retailer's shares lower.
Shares fell 5.6% to $3.01 in recent after-hours trading.
The mall-based retailer also reported a wider loss for its
quarter ended in November as sales and margins weakened.
For the current quarter ending in January, Aéropostale forecast
a per-share loss of 37 cents to 44 cents, while analysts polled by
Thomson Reuters expected a per-share loss of 36 cents.
Teen retailers like Aéropostale have been challenged by weak
demand, deep discounts and competition from so-called fast-fashion
peers like Swedish retailer Hennes & Mauritz AB, known as
H&M, and Forever 21 Inc. Earlier on Wednesday, rival
Abercrombie & Fitch Co. slashed its outlook for the year ending
in January, citing expectations that conditions will remain
challenging for the young-apparel sector. Meanwhile, American Eagle
Outfitters Inc. is set to report its quarterly results
Thursday.
Aéropostale has faced challenges of its own, as demand trends
have waned for its logo T-shirts and fleece offerings. In August,
Aéropostale unveiled a management shake-up that returned former
chief executive Julian Geiger to the helm.
"We have made small but measurable steps in the right direction,
which led to third-quarter results that were in line with our
guidance," Mr. Geiger stated in a news release Wednesday. "We ended
the quarter with inventories well-controlled, positioning us
appropriately as we progress through the fourth quarter."
"We believe that we understand what has been wrong with the
business, that we know how to fix it and that we have the resources
to do so," he added.
For the period ended Nov. 1, Aéropostale reported a loss of
$52.3 million, or 66 cents a share, compared with a year-earlier
loss of $25.6 million, or 33 cents a share. Excluding store-asset
write-downs, lease-buyout expenses, restructuring-related charges
and other items, the loss was 45 cents, compared with a
year-earlier loss of 29 cents. The company had projected a
per-share loss of 44 cents to 48 cents.
Revenue decreased 12% to $452.9 million, but came in above
analysts' estimates of $445 million.
Sales at existing locations, including e-commerce, dropped 11%
from the year-earlier period.
Gross margin fell to 15.2% from 17.1%.
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