WASHINGTON (dpa-AFX) - Casual apparel retailer Aeropostale Inc. (ARO) said Wednesday its profit for the third-quarter declined from last year, hurt by lower margins and a 9 percent drop in same store sales. Nonetheless, earnings per share for the quarter topped Wall Street estimates, as did sales.
Looking ahead, the mall-based specialty retailer forecast a weak earnings outlook for the fourth quarter, citing fierce competition amid the holiday season and the continued economic uncertainty.
New York-based Aeropostale reported third-quarter net income of $24 million or $0.30 per share, down from $58.5 million or $0.63 per share last year.
Results for the prior-year quarter included an after-tax charge of $0.04 per share, excluding which non-GAAP net income for that period would have been $0.67 per share.
On average, 29 analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts' estimate typically exclude one time items.
The company's total sales for the quarter declined to $596.5 million from $602.8 million a year ago. Wall Street analysts expected revenues of $581.50 million.
Aeropostale said results were impacted by a 9 percent decline in same store sales, compared to almost flat same store sales in the prior year.
Sales from e-commerce business for the quarter improved 19 percent to $45.7 million from $38.3 million a year ago.
Gross margin for the quarter deteriorated to 27.1 percent from 36.6 percent last year.
During the quarter, the company opened 7 Aeropostale and 6 P.S. from Aeropostale stores. At the end of the quarter, it operated 1,055 stores, compared to 1,002 last year.
Aeropostale ended the quarter with cash and cash equivalents of $109.4 million, and no debt. It currently has $145.2 million available under its share repurchase program.
Looking ahead, the company expects fourth-quarter net earnings of $0.35 to $0.38 per share.
Street analysts currently expect earnings of $0.44 per share for the fourth quarter.
Chief Executive Officer Thomas Johnson said the retail environment is getting more promotion-based and economic conditions continue to be challenging.
ARO closed Wednesday's regular trade at $15.51, up $0.77 or 5.22%, on a volume of 3.9 million shares on the NYSE. In after hours, the stock dropped $0.16 or 1.03%.
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