November 30, 2011 at 16:03 PM EST
Aeropostale Reports Third Quarter 2011 Results

NEW YORK, Nov. 30, 2011 /PRNewswire/ -- Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of active and casual apparel for young women and men, today reported results for the third quarter ended October 29, 2011.

Third Quarter Results

Diluted net earnings for the third quarter of fiscal 2011 were $0.30 per diluted share. The Company reported net earnings of $0.63 per diluted share in the third quarter last year.  The prior year net earnings included a previously disclosed after-tax charge of approximately $3.9 million, or $0.04 per diluted share, resulting from the related third quarter retirement plan payment to its Chairman and former Chief Executive Officer.

For the third quarter of fiscal 2011, total net sales decreased 1% to $596.5 million, from $602.8 million in the year ago period. Same store sales for the third quarter decreased 9%, compared to essentially flat same store sales last year. 

E-Commerce

Total net sales for the Company's e-commerce business for the third quarter of fiscal 2011 increased 19% to $45.7 million, from $38.3 million in the year ago period.

Cash Position and Share Repurchase Program

The Company ended the quarter with cash and cash equivalents of $109.4 million, and no debt. The Company currently has $145.2 million of availability remaining under its share repurchase program.

Store Growth and Capital Spending

The Company opened 7 Aeropostale and 6 P.S. from Aeropostale stores during the quarter. For the third quarter the company incurred $17.6 million in capital expenditures.

Fourth Quarter Guidance

The Company announced its earnings guidance for the fourth quarter of fiscal 2011.  The Company expects earnings in the range of $0.35 to $0.38 per diluted share for the fourth quarter.  The Company achieved diluted earnings per share of $0.95 in the fourth quarter last year.

Thomas P. Johnson, Chief Executive Officer, commented, "We are making incremental progress on our strategic initiatives by bringing more color and fashion to our merchandise assortment, managing our inventories appropriately and controlling our expenses carefully. However, we are not satisfied with our overall performance, and we remain cautious in our outlook. The retail environment remains incredibly promotional with many teen retailers increasing both the depth and breadth of their promotions. Additionally, unemployment remains high and there is continued uncertainty about the overall economic environment. Near-term we are focused on executing our holiday initiatives and long-term we remain committed to improving our financial performance as well as investing in future growth."

Conference Call Information

The Company will be holding a conference call today at 4:15 P.M EST to review its third quarter results. The broadcast will be available through the 'Investor Relations' link at www.aeropostale.com and www.fulldisclosure.com.  To listen to the broadcast your computer must have Windows Media Player installed. If you do not have Windows Media Player go to the latter site prior to the call, where you can download the software for free.

Aeropostale, Inc. is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aeropostale® stores and 4 to 12 year-old kids through its P.S. from Aeropostale™ stores. The Company provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values. Aeropostale® maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise. Aeropostale® products can only be purchased in its Aeropostale stores and online at www.aeropostale.com. P.S. from Aeropostale™ products can be purchased in P.S. from Aeropostale™ stores and online at www.ps4u.com. The Company currently operates 918 Aeropostale stores in 50 states and Puerto Rico, 67 Aeropostale stores in Canada and 72 P.S. from Aeropostale stores in 21 states. 

SPECIAL NOTE: THIS PRESS RELEASE AND ORAL STATEMENTS MADE FROM TIME TO TIME BY REPRESENTATIVES OF THE COMPANY CONTAIN CERTAIN "FORWARD-LOOKING STATEMENTS" CONCERNING EXPECTATIONS FOR SALES, STORE OPENINGS, GROSS MARGINS, EXPENSES, STRATEGIC DIRECTION AND EARNINGS.  ACTUAL RESULTS MIGHT DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO MATERIALLY DIFFER INCLUDE, CHANGES IN THE COMPETITIVE MARKETPLACE, INCLUDING THE INTRODUCTION OF NEW PRODUCTS OR PRICING CHANGES BY OUR COMPETITORS, CHANGES IN THE ECONOMY AND OTHER EVENTS LEADING TO A REDUCTION IN DISCRETIONARY CONSUMER SPENDING; SEASONALITY; RISKS ASSOCIATED WITH CHANGES IN SOCIAL, POLITICAL, ECONOMIC AND OTHER CONDITIONS AND THE POSSIBLE ADVERSE IMPACT OF CHANGES IN IMPORT RESTRICTIONS; RISKS ASSOCIATED WITH UNCERTAINTY RELATING TO THE COMPANY'S ABILITY TO IMPLEMENT ITS GROWTH STRATEGIES, AS WELL AS THE OTHER RISK FACTORS SET FORTH IN THE COMPANY'S FORM 10-K AND QUARTERLY REPORTS ON FORM 10-Q, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS.  READERS ARE REFERRED TO THOSE SEC FILINGS.

Company Contact:
Kenneth Ohashi/VP, Investor & Media Relations
(646) 452-1876 or kohashi@aeropostale.com

Media Contact:

Leigh Parrish, FTI Consulting, Inc.
(212) 850-5600

                                                          

EXHIBIT A

AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

 

 

October 29,

 2011

January 29,

2011

October 30,

 2010

 

 

 

 

ASSETS

 

 

 

Current Assets:

 

 

 

  Cash and cash equivalents

$109,379

$265,553

$239,457

  Merchandise inventory

265,133

156,596

239,391

  Other current assets

67,500

47,416

68,098

     Total current assets

442,012

469,565

546,946

 

 

 

 

Fixtures, equipment and improvements, net

313,483

299,242

293,409

 

 

 

 

Other assets

5,830

4,390

7,009

 

 

 

 

TOTAL ASSETS

$761,325

$773,197

$847,364

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current Liabilities:

 

 

 

  Accounts payable

$ 171,592

$ 103,014

$ 142,572

  Accrued expenses

77,701

113,088

91,937

     Total current liabilities

249,293

216,102

234,509

 

 

 

 

Other non-current liabilities

129,834

124,458

116,237

 

 

 

 

Stockholders' equity

382,198

432,637

496,618

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$761,325

$773,197

$847,364

                                                          

EXHIBIT B

AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA

(in thousands, except per share and store data)

 

 

 

13 weeks ended

 

October 29, 2011

October 30, 2010

 

 

% of sales

 

% of sales

 

 

 

 

 

Net sales

$596,506

100.0%

$602,756

100.0%

 

 

 

 

 

Cost of sales (including certain buying, occupancy and warehousing expenses)

434,985

72.9

382,169

63.4

 

 

 

 

 

Gross profit

161,521

27.1

220,587

36.6

 

 

 

 

 

Selling, general and administrative expenses

121,793

20.4

124,285

20.6

 

 

 

 

 

Income from operations

39,728

6.7

96,302

16.0

 

 

 

 

 

Interest expense, net

185

0.0

10

0.0

 

 

 

 

 

Income before income taxes

39,543

6.7

96,292

16.0

 

 

 

 

 

Income taxes

15,435

2.7

37,757

6.3

 

 

 

 

 

Net income

$24,108

4.0%

$58,535

9.7%

 

 

 

 

 

Basic earnings per share

$0.30

 

$0.64

 

 

 

 

 

 

Diluted earnings per share

$0.30

 

$0.63

 

 

 

 

 

 

Weighted average basic shares

80,741

 

91,954

 

 

 

 

 

 

Weighted average diluted shares

81,068

 

92,916

 

 

 

 

 

 

STORE DATA:

 

 

 

 

 

 

 

 

 

Comparable store sales (decrease) increase

(9)%

 

0%

 

 

 

 

 

 

Stores open at end of period

1,055

 

1,002

 

 

 

 

 

 

Total square footage at end of period

3,886,083

 

3,634,603

 

 

 

 

 

 

Average square footage during period

3,862,152

 

3,596,305

 

                                                          

EXHIBIT C

AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA

(in thousands, except per share and store data)

 

 

 

39 weeks ended

 

October 29, 2011

October 30, 2010

 

 

% of sales

 

% of sales

 

 

 

 

 

Net sales

$1,533,880

100.0%

$1,561,103

100.0%

 

 

 

 

 

Cost of sales (including certain buying, occupancy and warehousing expenses)

1,121,666

73.1

973,067

62.3

 

 

 

 

 

Gross profit

412,214

26.9

588,036

37.7

 

 

 

 

 

Selling, general and administrative expenses

339,524

22.2

345,115

22.1

 

 

 

 

 

Income from operations

72,690

4.7

242,921

15.6

 

 

 

 

 

Interest expense, net

300

0.0

50

0.0

 

 

 

 

 

Income before income taxes

72,390

4.7

242,871

15.6

 

 

 

 

 

Income taxes

28,974

1.9

95,352

6.1

 

 

 

 

 

Net income

$43,416

2.8%

$147,519

9.5%

 

 

 

 

 

Basic earnings per share

$0.53

 

$1.58

 

 

 

 

 

 

Diluted earnings per share

$0.53

 

$1.57

 

 

 

 

 

 

Weighted average basic shares

81,358

 

93,113

 

 

 

 

 

 

Weighted average diluted shares

81,924

 

94,150

 

 

 

 

 

 

STORE DATA:

 

 

 

 

 

 

 

 

 

Comparable store sales (decrease) increase

(10)%

 

3%

 

 

 

 

 

 

Average square footage during period

3,806,693

 

3,520,657

 

SOURCE Aeropostale, Inc.

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