WASHINGTON (dpa-AFX) - Aeropostale Inc. (ARO) Thursday reported a lower profit for the second quarter, due mainly to the absence of a one-time tax benefit that was recorded a year ago. The apparel retailer's sales for the quarter grew four percent despite a flat same store sales. Aeropostale's earnings were in line with estimates, while revenues fell short of expectations.
Shares of Aeropostale fell eight percent in extended trading hours, after detailing a weak third-quarter earnings outlook which is expected to miss current Street expectations. For the third quarter, the company anticipate earnings in the range of $0.25 to $0.30 per share. Analysts currently expect earnings of $0.38 per share for the quarter.
Aeropostale' net sales for the quarter grew 4 percent to $485.3 million from $468.2 million last year. Analysts expected revenues of $490.11 million for the quarter.
Same-store sales, including the e-commerce channel, were essentially flat, while the year-ago quarter registered a 12 percent decline. Excluding e-commerce, same store sales decreased 1 percent.
Chief Executive Thomas Johnson observed, 'Our core basics business experienced significant pricing pressure due to the highly promotional and competitive retail landscape. As a result, we promoted these businesses more aggressively than initially expected to end the quarter with inventories inline with our plan.'
Aeropostale, which caters to apparels and accessories mainly for young men and women, have been reporting declines in profit for the past few quarters, hurt mainly by increased competition and higher promotional costs.
Gross margins for the quarter improved to 25.3 percent from 24.4 percent last year. Selling, general and administrative expenses for the period rose to $122.2 million from $108.6 million last year.
New York-based Aeropostale's second-quarter profit declined to $0.1 million or breakeven per share from $2.9 million or $0.04 per share last year. On average, 25 analysts polled by Thomson Reuters expected the company to post breakeven per share for the quarter. Analysts' estimates typically exclude special items.
Last year's results included a favorable pre-tax benefit of $8.7 million, resulting from the resolution of a dispute with a sourcing agent. Excluding special items, the company posted a loss of $1.7 million or $0.02 per share last year.
ARO closed Thursday at $13.66, up $0.03 or 0.22%, on a volume of 6.1 million shares on the NYSE. In after hours, the stock fell $1.15 or 8.42%.
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