Aeropostale Loss Widens, Sees Weak Q2; Shares Tank 17%

(RTTNews) - Aeropostale Inc. (ARO) Thursday said its first-quarter loss widened from a year ago as the teen-apparel retailer's revenues and margins continued to deteriorate. Loss for the quarter was better than what Wall Street estimated, but revenues fell short of expectations.

Moving ahead, the retailer currently sees its second-quarter loss to be wider than analysts' current estimates. Shares of Aeropostale tumbled 17 percent in the after hours trade, following the news.

New York-based Aeropostale's first-quarter loss widened to $76.8 million or $0.98 per share from $12.2 million or $0.16 per share last year.

Adjusted loss, which excludes special items, for the quarter was $41.1 million or $0.52 per share. On average, 25 analysts polled by Thomson Reuters expected a loss of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.

Aeropostale's net sales for the first quarter decreased 12 percent to $395.9 million from $452.3 million last year. Twenty-two analysts had a consensus revenue estimate of $410.04 million for the quarter.

Same-store sales, including the e-commerce channel, for the first quarter decreased 13 percent, compared to a decrease of 14 percent last year.

Gross margin, or percentage of sales left after deducting cost of sales, dropped significantly to 17.8 percent from 22.4 percent last year.

Aeropostale has been losing money for the past few quarters and has closed under-performing stores in an attempt to revive the company. Aeropostale is also under pressure from certain quarters to sell itself in order to enhance shareholder value.

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

Chief Executive 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 forward to the second quarter, the company expects to post a loss of $0.55 to $0.61 per share. Analysts currently expect second-quarter loss of $0.50 per share.

ARO closed Thursday's trading at $4.52, up $0.08 or 1.80%, on the NYSE. The stock, however, plunged $0.82 or 18.14% in after-hours trade.