Aeropostale (ARO) Lowers Q2 Expectations
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Aeropostale, Inc. (NYSE: ARO) announced updated expectations for the second quarter.
For the second quarter of fiscal 2013, net sales decreased 6% to $454.0 million, from $485.3 million in the year ago period. Comparable sales, including the e-commerce channel, for the second quarter decreased by 15%, compared to the corresponding 13-week period ended August 4, 2012.
Based on lower than expected sales and margins for the quarter, the Company now expects its second quarter loss to be in the range of approximately $0.42 to $0.44 per diluted share, which includes charges totaling approximately $0.19 per diluted share that were not previously reflected in the Company's original second quarter guidance. More specifically, our updated expectations, compared to our previously issued guidance, reflect:
* an $8.9 million, or $0.11 per diluted share, lower than expected income tax benefit due to a change in the estimated effective tax rate to 25% from 45% resulting from lower taxable income;
* an after-tax charge of approximately $4.4 million, or $0.06 per diluted share, resulting from store asset impairment charges; and
* an after-tax charge of approximately $1.4 million, or $0.02 per diluted share, as a result of the accounting effect related to retirement features of our stock based compensation plan.
*** The Street was looking for Q2 revs of $460.6 million and loss of $0.17.
Thomas P. Johnson, Chief Executive Officer, commented, "During the second quarter, we continued to experience the challenging trends we faced in the first quarter. Our performance was driven by an increase in promotional activity as we navigated through balancing our assortment, weak traffic trends and a challenging retail environment, particularly during the July selling period. As we reposition the Aeropostale brand, we believe our current merchandise assortment is more fashionable and relevant. Our entire organization is focused intently on accelerating customer adoption and regaining market share."
The Company expects to announce second quarter earnings and an update on back-to-school trends on Thursday, August 22, 2013 at 4:15 PM (EDT).
For the second quarter of fiscal 2013, net sales decreased 6% to $454.0 million, from $485.3 million in the year ago period. Comparable sales, including the e-commerce channel, for the second quarter decreased by 15%, compared to the corresponding 13-week period ended August 4, 2012.
Based on lower than expected sales and margins for the quarter, the Company now expects its second quarter loss to be in the range of approximately $0.42 to $0.44 per diluted share, which includes charges totaling approximately $0.19 per diluted share that were not previously reflected in the Company's original second quarter guidance. More specifically, our updated expectations, compared to our previously issued guidance, reflect:
* an $8.9 million, or $0.11 per diluted share, lower than expected income tax benefit due to a change in the estimated effective tax rate to 25% from 45% resulting from lower taxable income;
* an after-tax charge of approximately $4.4 million, or $0.06 per diluted share, resulting from store asset impairment charges; and
* an after-tax charge of approximately $1.4 million, or $0.02 per diluted share, as a result of the accounting effect related to retirement features of our stock based compensation plan.
*** The Street was looking for Q2 revs of $460.6 million and loss of $0.17.
Thomas P. Johnson, Chief Executive Officer, commented, "During the second quarter, we continued to experience the challenging trends we faced in the first quarter. Our performance was driven by an increase in promotional activity as we navigated through balancing our assortment, weak traffic trends and a challenging retail environment, particularly during the July selling period. As we reposition the Aeropostale brand, we believe our current merchandise assortment is more fashionable and relevant. Our entire organization is focused intently on accelerating customer adoption and regaining market share."
The Company expects to announce second quarter earnings and an update on back-to-school trends on Thursday, August 22, 2013 at 4:15 PM (EDT).
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