Aeropostale Reports Record Third Quarter 2010 and November Sales Results

Dec 01, 2010, 16:05 ET from Aeropostale, Inc.

NEW YORK, Dec. 1, 2010 /PRNewswire-FirstCall/ -- 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 30, 2010 and total net sales for the four-week period ended November 27, 2010.

Third Quarter Results

Diluted net earnings for the third quarter of fiscal 2010 were $0.63 per diluted share, which includes 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.  The Company reported net earnings of $0.61 per diluted share in the third quarter last year.

For the third quarter of fiscal 2010, total net sales increased 6% to $602.8 million, from $567.8 million in the year ago period. Same store sales for the third quarter were essentially flat, compared to a same store sales increase of 10% last year.  Total net sales for the Company's e-commerce business for the third quarter of fiscal 2010 increased 17% to $38.3 million, from $32.6 million in third quarter last year.

Thomas P. Johnson, Chief Executive Officer, said, "We are very pleased to deliver third quarter earnings at the high-end of our initial guidance. Our ability to navigate effectively through the challenging and promotional environment truly underscores the power and flexibility of our promotional specialty store model."

November Sales Results

Total net sales for the four-week period ended November 27, 2010 increased 7% to $243.8 million, from $228.0 million for the four-week period ended November 28, 2009. The Company's same store sales decreased 1% for the month, compared to a same store sales increase of 7% in the year ago period.

The Company stated that it experienced a mid-single digit same store sales increase on the Friday after Thanksgiving Day. The Company also stated, however, that sales trends decelerated significantly for the remainder of the Thanksgiving Day weekend.

Fourth Quarter Guidance

The Company announced its earnings guidance for the fourth quarter of fiscal 2010.  The Company expects earnings in the range of $0.94 to $0.96 per diluted share for the fourth quarter.  The Company achieved diluted earnings per share of $0.99 in the fourth quarter last year.

Store Growth and Capital Spending for Fiscal 2011

For fiscal 2011 the Company plans to invest approximately $70.0 million to open approximately 30 Aeropostale stores, approximately 20 P.S. from Aeropostale stores, approximately 50 store remodels, in addition to certain information technology investments. This compares to capital expenditures of approximately $96.0 million in fiscal 2010.

Discontinuation of Monthly Sales Reporting

Beginning in Fiscal 2011, the Company will discontinue monthly sales reporting. Sales and earnings will be reported in conjunction with the quarterly earnings announcement.

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 7 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 908 Aeropostale stores in 49 states and Puerto Rico, 59 Aeropostale stores in Canada and 47 P.S. from Aeropostale stores in 13 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

EXHIBIT A

AEROPOSTALE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

October 30, 2010

January 30, 2010

October 31, 2009

ASSETS

Current Assets:

 Cash and cash equivalents

$239,457

$ 346,976

$285,627

 Merchandise inventory

239,391

132,915

221,516

 Other current assets

68,098

50,126

43,236

    Total current assets

546,946

530,017

550,379

Fixtures, equipment and improvements, net

293,409

251,558

262,331

Other assets

7,009

10,734

16,128

TOTAL ASSETS

$847,364

$792,309

$828,838

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

 Accounts payable

$  142,572

$  90,850

$  144,564

 Accrued expenses

90,537

150,990

122,052

    Total current liabilities

233,109

241,840

266,616

Other non-current liabilities

117,637

115,980

113,773

Stockholders' equity

496,618

434,489

448,449

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$847,364

$792,309

$828,838

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 30, 2010

October 31, 2009

% of sales

% of sales

Net sales

$602,756

100.0%

$567,838

100.0%

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

382,169

63.4

344,921

60.7

Gross profit

220,587

36.6

222,917

39.3

Selling, general and administrative expenses

124,285

20.6

117,236

20.6

Income from operations

96,302

16.0

105,681

18.7

Interest (expense) income

(10)

0.0

27

0.0

Income before income taxes

96,292

16.0

105,708

18.7

Income taxes

37,757

6.3

43,079

7.6

Net income

$58,535

9.7%

$62,629

11.1%

Basic earnings per share

$0.64

$0.62

Diluted earnings per share

$0.63

$0.61

Weighted average basic shares

91,954

100,322

Weighted average diluted shares

92,916

101,987

STORE DATA:

Comparable store sales increase

0%

10%

Stores open at end of period

1,002

945

Total square footage at end of period

3,635,623

3,398,307

Average square footage during period

3,596,645

3,380,722

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 30, 2010

October 31, 2009

% of sales

% of sales

Net sales

$1,561,103

100.0%

$1,428,882

100.0%

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

973,067

62.3

892,383

62.5

Gross profit

588,036

37.7

536,499

37.5

Selling, general and administrative expenses

345,115

22.1

312,964

21.9

Income from operations

242,921

15.6

223,535

15.6

Interest (expense) income

(50)

0.0

153

0.0

Income before income taxes

242,871

15.6

223,688

15.6

Income taxes

95,352

6.1

90,795

6.4

Net income

$147,519

9.5%

$132,893

9.2%

Basic earnings per share

$1.58

$1.32

Diluted earnings per share

$1.57

$1.30

Weighted average basic shares

93,113

100,683

Weighted average diluted shares

94,150

102,039

STORE DATA:

Comparable store sales increase

3%

11%

Average square footage during period

3,520,770

3,333,693

Company Contact:

Kenneth Ohashi/VP, Investor & Media Relations

(646) 452-1876 or kohashi@aeropostale.com

Media Contact:

Leigh Parrish/Melissa Kahaly, FD

(212) 850-5600

SOURCE Aeropostale, Inc.



RELATED LINKS

http://www.aeropostale.com