Aeropostale, Inc. : Aeropostale Reports Results For Second Quarter Of Fiscal 2012
08/16/2012| 04:05pm US/Eastern
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NEW YORK, Aug. 16, 2012 /PRNewswire/ -- Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual apparel for young women and men, today reported results for the second quarter of fiscal 2012, and provided guidance for the third quarter of fiscal 2012.
Second Quarter Performance
Net income for the second quarter of 2012 was approximately $0.1 million, or $0.00 per diluted share. Net income for the second quarter of 2011 was $2.9 million, or $0.04 per diluted share, which included a non-recurring pre-tax benefit to the Company's gross profit of $8.7 million, or $0.06 per diluted share, which resulted from the resolution of a dispute with one of the Company's sourcing agents. Of this benefit, $8.0 million, related to periods prior to fiscal 2011. Excluding this item, the adjusted net loss for the second quarter of 2011 was ($1.7) million, or ($0.02) per diluted share.
For the second quarter of fiscal 2012, net sales increased 4% to $485.3 million, from $468.2 million in the year ago period. Comparable sales, including the e-commerce channel, for the second quarter were essentially flat compared to a 12% decrease last year. Comparable store sales, excluding the e-commerce channel, for the second quarter decreased 1%, compared to a 14% decrease last year.
Thomas P. Johnson, Chief Executive Officer, commented, "While we were encouraged by the customer response to our fashion offering, we were disappointed by our overall financial performance for the second quarter. 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."
E-commerce
Net revenue from the Company's e-commerce business for the second quarter of fiscal 2012 increased 27% to $31.9 million, from $25.1 million in the year ago period.
Cash Positioning and Share Repurchase Program
The Company ended the quarter with cash and cash equivalents of $169.6 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 seven Aeropostale and 15 P.S. from Aeropostale stores, and closed four Aeropostale stores during the quarter. For the second quarter, the Company invested $20.8 million in planned capital expenditures.
Third Quarter Guidance
Based on a soft start to the important back-to-school selling season, the Company expects earnings in the range of $0.25 to $0.30 per diluted share, compared to net earnings of $0.30 per diluted share in the same period last year.
Mr. Johnson continued, "While I believe we are focused on the right key initiatives to improve our overall business, sales trends for the early back-to-school season have been inconsistent. As we move through the remainder of the year, our entire organization is aligned and committed to executing on our strategic initiatives with a sense of urgency and determination."
Use of Non-GAAP Measures
The Company believes that the disclosure of adjusted net loss and adjusted loss per diluted share, which are non-GAAP financial measures, provides investors with useful information to help them better understand the Company's results (see Exhibit D).
Conference Call Information
The Company will be holding a conference call today at 4:15 P.M EDT to review its second 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.
About Aeropostale, Inc.
Aeropostale®, Inc. is a primarily 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 fashion and fashion basics at compelling values in an innovative and exciting store environment. 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 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 and www.aeropostale.com. The Company currently operates 914 Aeropostale® stores in 50 states and Puerto Rico, 75 Aeropostale stores in Canada and 97 P.S. from Aeropostale® stores in 22 states. In addition, pursuant to various licensing agreements, our licensees currently operate 20 Aeropostale® and P.S. from Aeropostale® stores in the Middle East, Asia and Europe.
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 OR CIRCUMSTANCES.
EXHIBIT A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 28, 2012 January 28, 2012 July 30, 2011
------------- ---------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $169,640 $223,712 $73,077
Merchandise inventory 246,708 163,522 248,491
Other current assets 65,921 54,565 79,241
------ ------ ------
Total current assets 482,269 441,799 400,809
Fixtures, equipment and
improvements, net 300,517 287,393 316,000
Other assets 4,161 6,041 5,186
----- ----- -----
TOTAL ASSETS $786,947 $735,233 $721,995
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $141,031 $103,476 $159,805
Accrued expenses 89,788 89,735 75,249
------ ------ ------
Total current liabilities 230,819 193,211 235,054
Other non-current
liabilities 134,012 132,588 129,854
Stockholders' equity 422,116 409,434 357,087
------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $786,947 $735,233 $721,995
======== ======== ========
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(In thousands, except per share and store data)
(Unaudited)
13 weeks ended
--------------
July 28, 2012 July 30, 2011
------------- -------------
% of sales % of sales
---------- ----------
Net sales $485,337 100.0% $468,191 100.0%
Cost of sales
(including
certain buying,
occupancy and
warehousing
expenses)(1) 362,567 74.7 354,156 75.6
------- ---- ------- ----
Gross profit(1) 122,770 25.3 114,035 24.4
Selling, general
and
administrative
expenses 122,175 25.2 108,649 23.2
------- ---- ------- ----
Income from
operations 595 0.1 5,386 1.2
Interest expense,
net 148 0.0 48 0.0
--- --- --- ---
Income before
income taxes 447 0.1 5,338 1.2
Income taxes 376 0.1 2,397 0.5
--- --- ----- ---
Net income $71 0.0% $2,941 0.7%
=== === ====== ===
Basic earnings
per share $0.00 $0.04
===== =====
Diluted earnings
per share $0.00 $0.04
===== =====
Weighted average
basic shares 81,266 80,729
Weighted average
diluted shares 81,708 81,259
STORE DATA:
Comparable sales
change
(including e-
commerce
channel) 0% (12)%
Comparable store
sales change
(excluding e-
commerce
channel) (1)% (14)%
Stores open at
end of period 1,085 1,042
Total square
footage at end
of period 4,010,522 3,836,721
Average square
footage during
period 3,988,909 3,820,432
(1) During the second quarter of 2011, the Company recorded a favorable pre-tax benefit of $8.7 million, resulting from the resolution of a previously disclosed dispute with one of our sourcing agents. Of this benefit, $8.0 million related to periods prior to fiscal 2011 (see Exhibit D).
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(In thousands, except per share and store data)
(Unaudited)
26 weeks ended
--------------
July 28, 2012 July 30, 2011
------------- -------------
% of sales % of sales
---------- ----------
Net sales $982,551 100.0% $937,374 100.0%
Cost of sales
(including
certain buying,
occupancy and
warehousing
expenses)(1) 720,769 73.4 686,681 73.3
------- ---- ------- ----
Gross profit(1) 261,782 26.6 250,693 26.7
Selling, general
and
administrative
expenses 244,498 24.9 217,731 23.2
------- ---- ------- ----
Income from
operations 17,284 1.7 32,962 3.5
Interest expense,
net 307 0.0 115 0.0
--- --- --- ---
Income before
income taxes 16,977 1.7 32,847 3.5
Income taxes 6,330 0.6 13,539 1.4
----- --- ------ ---
Net income $10,647 1.1% $19,308 2.1%
======= === ======= ===
Basic earnings
per share $0.13 $0.24
===== =====
Diluted earnings
per share $0.13 $0.23
===== =====
Weighted average
basic shares 81,155 81,667
Weighted average
diluted shares 81,667 82,352
STORE DATA:
Comparable sales
change
(including e-
commerce
channel) 1% (9)%
Comparable store
sales change
(excluding e-
commerce
channel) 0% (10)%
Average square
footage during
period 3,958,836 3,778,964
(1) During the second quarter of 2011, the Company recorded a favorable pre-tax benefit of $8.7 million, resulting from the resolution of a previously disclosed dispute with one of our sourcing agents. Of this benefit, $8.0 million related to periods prior to fiscal 2011 (see Exhibit D).
EXHIBIT D
AEROPOSTALE, INC.
RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE
(In thousands, except per share data)
(Unaudited)
The following table presents a reconciliation of net income and diluted earnings per share ("EPS") on a GAAP basis to the non-GAAP adjusted basis discussed in this release.
13 weeks ended
--------------
July 28, 2012 July 30, 2011
------------- -------------
Net Income Diluted EPS Net Income Diluted EPS
As reported $71 $0.00 $2,941 $0.04
Vendor dispute resolution(1) - - (4,688) (0.06)
--- --- ------ -----
As adjusted $71 $0.00 $(1,747) $(0.02)
=== ===== ======= ======
26 weeks ended
--------------
July 28, 2012 July 30, 2011
------------- -------------
Net Income Diluted EPS Net Income Diluted EPS
As reported $10,647 $0.13 $19,308 $0.23
Vendor dispute resolution(1) - - (4,704) (0.05)
--- --- ------ -----
As adjusted $10,647 $0.13 $14,604 $0.18
======= ===== ======= =====
(1) During the second quarter of 2011, the Company recorded a favorable pre-tax benefit of $8.7 million, resulting from the resolution of a previously disclosed dispute with one of our sourcing agents. Of this benefit, $8.0 million related to periods prior to fiscal 2011.
Company Contact:
Kenneth Ohashi/VP, Investor & Media Relations
(646) 452-1876 or kohashi@aeropostale.com
Media Contact:
Leigh Parrish, FTI Consulting
(212) 850-5600
SOURCE Aeropostale, Inc.
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