Aeropostale Loss Narrows, Shares Tank On Weak Outlook

(RTTNews) - Struggling teen-apparel retailer Aeropostale Inc. (ARO), Thursday said its fourth-quarter loss narrowed from a year ago, driven largely by stronger margins even as revenues dropped. Loss for the quarter was better than Wall Street expected, while revenues trumped expectations.

However, the retailer detailed a weak earnings outlook for the first quarter, dragging its shares down over 9 percent in after-hours trade on the New York Stock Exchange.

New York-based Aeropostale's fourth-quarter loss narrowed to $13.5 million or $0.17 per share from last year's loss of $70.3 million or $0.90 per share.

Adjusted loss, which excludes special items, for the quarter narrowed to $0.01 per share from last year's loss of $0.35 per share. On average, 22 analysts polled by Thomson Reuters estimated a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

Aeropostale's net sales for the quarter dropped 11 percent at $593.8 million from $670.0 million a year ago. Analysts had a consensus revenue estimate of $576.8 million for the quarter.

Same-store sales, including the e-commerce channel, for the quarter dropped 9 percent compared to a drop of 15 percent last year. Gross margin, or percentage of sales left after deducting cost of sales, improved to 22.7 percent from 13.0 percent last year.

Looking forward to the first quarter, the company expects a loss of $0.61 to $0.53 per share. Analysts currently expect a loss of $0.36 per share for the quarter.

Chief Executive Julian Geiger said, "Our first quarter outlook for 2015 reflects challenging trends as we continue to see softness in consumer demand as a result of weak traffic."

ARO closed Thursday's trading at $3.70, down $0.27 or 6.80%, on the NYSE. The stock further dropped $0.35 or 9.46% in the after-hours trade.