Aeropostale Reports Results for Fourth Quarter and Fiscal 2012

Thu Mar 14, 2013 4:01pm EDT

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Fourth Quarter Loss of $0.01 Per Diluted Share
NEW YORK,  March 14, 2013  /PRNewswire/ -- Aeropostale, Inc. (NYSE: ARO), a
mall-based specialty retailer of casual apparel for young women and men, today
reported results for the fourth quarter of 2012 (the fourth quarter of fiscal
2012 consisted of 14 weeks compared to the fourth quarter of fiscal 2011, which
consisted of 13 weeks) and fiscal 2012 (fiscal 2012 consisted of 53 weeks
compared to fiscal 2011, which consisted of 52 weeks).  The Company also
provided guidance for the first quarter of fiscal 2013.

Fourth Quarter Performance

For the fourth quarter of fiscal 2012, net sales decreased 1% to  $797.7
million, from  $808.4 million  in the year ago period. Fourth quarter comparable
sales, including the e-commerce channel, decreased 8% compared to a 7% decrease
for the corresponding 14-week period of the prior year.  Fourth quarter
comparable store sales, excluding the e-commerce channel, decreased 9%, compared
to a decrease of 9% for the corresponding 14-week period of the prior year.   

The Company reported a net loss for the fourth quarter of fiscal 2012 of  $0.7
million, or  $0.01  per diluted share, which included an after-tax charge of 
$19.7 million, or  $0.25  per diluted share, resulting from store asset
impairment charges.  The Company reported net income of  $26.1 million, or 
$0.32  per diluted share, for the fourth quarter of 2011, which included an
after-tax charge of  $9.5 million, or  $0.12  per diluted share, resulting from
store asset impairment charges.

Excluding the aforementioned store asset impairment charges, the Company
reported adjusted net income of  $19.1 million, and adjusted earnings of  $0.24 
per diluted share in the fourth quarter of 2012 (see Exhibit D).  This compares
to the Company's previously issued guidance of  $0.20 to $0.24  per diluted
share, which did not include the aforementioned charges.  Also excluding store
asset impairment charges, the Company reported adjusted net income of  $35.6
million, or  $0.44  per diluted share, for the fourth quarter of the prior year.

Full Fiscal Year Performance

Net sales for fiscal 2012 increased 2% to  $2.386 billion, from  $2.342 billion 
in the year ago period. Fiscal 2012 comparable sales, including the e-commerce
channel, decreased 2% compared to an 8% decrease for the comparable 53-week
period of the prior year.  Fiscal 2012 comparable store sales, excluding the
e-commerce channel, decreased 4%, compared to a decrease of 9% for the
comparable 53-week period of the prior year.

Net income for fiscal 2012 was  $34.9 million, or  $0.43  per diluted share,
which included an after-tax charge of  $19.7 million, or  $0.25  per diluted
share, resulting from store asset impairment charges.   

Net income for fiscal 2011 was  $69.5 million, or  $0.85  per diluted share,
which included the following items:

* Store asset impairment charges of  $9.1 million  after tax, or  $0.11  per
diluted, recorded during the fourth quarter of fiscal 2011, partially offset by 

* A benefit of  $5.3 million  after tax, or  $0.06  per diluted share, from the
previously disclosed resolution of a dispute with one of the Company's sourcing
agents related to prior period allowances in the second quarter of fiscal 2011.

Excluding these items in both years, adjusted net income for fiscal 2012 was 
$54.7 million, or  $0.68  per diluted share, compared to adjusted net income for
fiscal 2011 of  $73.3 million, or  $0.90  per diluted share (see Exhibit D).  

Thomas P. Johnson, Chief Executive Officer, commented, "Our results for the
fourth quarter and fiscal year were disappointing; however, we made progress
during 2012 against our strategic initiatives.  We added new talent to our team,
injected more relevant fashion into our assortments, and developed our next
generation store model.  Further, we continued to build positive momentum in our
P.S. business, extended our global reach by opening in new markets, and grew our
e-commerce business, which included the successful acquisition of GoJane.com. 
While we have not reached the level and consistency in our performance for which
we strive, we are committed to evolving and transforming our product to position
ourselves as a true lifestyle brand."

E-commerce

Net revenues from the Company's e-commerce business for the fourth quarter of
fiscal 2012, including net revenues from the GoJane business beginning  November
14, 2012, increased 16% to  $96.8 million, from  $83.2 million  in the year ago
period.  Net revenues from the Company's e-commerce business for fiscal 2012
increased 19% to  $217.0 million, from  $182.1 million  in the year ago period.

Cash Positioning and Share Repurchase Program

The Company ended fiscal 2012 with cash and cash equivalents of  $231.5 million 
and no debt. The Company repurchased 3.0 million shares of common stock for
approximately  $40.8 million  during fiscal 2012.  The Company currently has 
$104.4 million  of availability remaining under its share repurchase program.

First Quarter Guidance

For the first quarter of fiscal 2013, the Company expects to report a loss in
the range of  $0.15 to $0.20  per diluted share, compared to earnings of  $0.13 
per diluted share last year.  

Mr. Johnson continued, "We anticipate a challenging first quarter as a result of
expected margin pressures from Holiday carryover inventory, and the impact of a
weak macroeconomic environment.  We will continue to plan our business
conservatively and manage our cost structure carefully.  While we face near-term
challenges, we believe we have the right strategies and the right team in place
to improve the trajectory of our business."

Store Growth and Capital Spending for Fiscal 2013

For fiscal 2013, the Company plans to open approximately 14 Aeropostale stores,
approximately 60 P.S. from Aeropostale stores, remodel approximately 30 stores,
and close approximately 15 to 20 Aeropostale stores.  The Company expects to
invest approximately  $89.0 million  in its store growth and certain information
technology.  This compares to capital expenditures of approximately  $72.3
million  in fiscal 2012.

Conference Call Information

The Company will be holding a conference call today at  4:15 P.M. ET  to review
its fourth 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.  

Use of Non-GAAP Measures

The Company believes that the disclosure of adjusted net income and adjusted
earnings 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).   

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 906 Aeropostale stores in 50
states and  Puerto Rico, 78 Aeropostale stores in  Canada  and 103 P.S. from
Aeropostale stores in 22 states. In addition, pursuant to various licensing
agreements, our licensees currently operate 28 Aeropostale and P.S. from
Aeropostale stores in the  Middle East,  Asia  and Europe.  On  November 13,
2012, Aeropostale, Inc. acquired substantially all of the assets of online
women's fashion footwear and apparel retailer GoJane.com, Inc. Based in 
Ontario,  California, GoJane.com focuses primarily on fashion footwear, with a
select offering of contemporary apparel and other accessories.

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.

 EXHIBIT A                                                                                 
                                                                                           
 AEROPOSTALE, INC.                                                                               
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                           
 (In thousands)                                                                                  
 (Unaudited)                                                                                     
                                                                                           
                                                February 2, 2013       January 28, 2012    
 ASSETS                                                                                    
 Current Assets:                                                                           
 Cash and cash equivalents                   $  231,501             $  223,712             
 Merchandise inventory                          155,463                163,522             
 Other current assets                           53,603                 54,565              
 Total current assets                           440,567                441,799             
                                                                                           
 Fixtures, equipment and improvements, net      263,512                287,393             
 Goodwill and intangible assets                 28,599                 -                   
 Other assets                                   9,303                  6,041               
                                                                                           
 TOTAL ASSETS                                $  741,981             $  735,233             
                                                                                           
 LIABILITIES AND STOCKHOLDERS' EQUITY                                                      
 Current Liabilities:                                                                      
 Accounts payable                            $  89,991              $  103,476             
 Accrued expenses                               114,700                89,735              
 Total current liabilities                      204,691                193,211             
                                                                                           
 Other non-current liabilities                  126,974                132,588             
                                                                                           
 Stockholders' equity                           410,316                409,434             
                                                                                           
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $  741,981             $  735,233             
                                                                                           


 EXHIBIT B                                                                                                                           
                                                                                                                                     
 AEROPOSTALE, INC.                                                                                                                            
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND                                                                                          
 SELECTED STORE DATA                                                                                                                          
 (In thousands, except per share and store data)                                                                                              
 (Unaudited)                                                                                                                                  
                                                                                                                                     
                                                                  14 weeks ended                        13 weeks ended                   
                                                                  February 2, 2013                      January 28, 2012                 
                                                                                     % of sales                          % of sales  
 Net sales                                                     $  797,709            100.0%        $  808,380            100.0%      
                                                                                                                                     
 Cost of sales (including certain buying, occupancy and           639,141            80.2%            612,250            75.7%       
 
warehousing expenses)  1                                                                                                           
                                                                                                                                     
 Gross profit                                                     158,568            19.8%            196,130            24.3%       
                                                                                                                                     
 Selling, general and administrative expenses                     158,834            19.9%            155,305            19.2%       
                                                                                                                                     
 Income (loss) from operations                                    (266)              -0.1%            40,825             5.1%        
                                                                                                                                     
 Interest expense, net                                            139                0.0%             117                0.0%        
                                                                                                                                     
 Income (loss) before income taxes                                (405)              -0.1%            40,708             5.1%        
                                                                                                                                     
 Income taxes                                                     266                0.0%             14,609             1.8%        
                                                                                                                                     
 Net income (loss)                                             $  (671)              -0.1%         $  26,099             3.3%        
                                                                                                                                     
 Basic earnings (loss) per share                               $  (0.01)                           $  0.32                           
                                                                                                                                     
 Diluted earnings (loss) per share                             $  (0.01)                           $  0.32                           
                                                                                                                                     
 Weighted average basic shares                                    78,272                              80,757                         
                                                                                                                                     
 Weighted average diluted shares                                  78,272                              81,472                         
                                                                                                                                     
 STORE DATA:                                                                                                                         
                                                                                                                                     
 Comparable sales change (including e-commerce channel)           -8%                                 -7%                            
                                                                                                                                     
 Comparable store sales change (excluding e-commerce channel)     -9%                                 -9%                            
                                                                                                                                     
 Stores open at end of period                                     1,084                               1,057                          
                                                                                                                                     
 Total square footage at end of period                            4,013,521                           3,909,196                      
                                                                                                                                     
 Average square footage during period                             4,048,435                           3,910,242                      
                                                                                                                                     
                                                                                                                                     
 1 Cost of sales for the fourth quarter of fiscal 2012 was unfavorably impacted by store asset impairment charges of $32.6 million ($19.7 million after tax, or $0.25 per diluted share).   Cost of sales for the fourth quarter of fiscal 2011 was unfavorably impacted by store asset impairment charges of $14.8 million ($9.5 million after tax, or $0.12 per diluted share). 


 EXHIBIT C                                                                                                                           
                                                                                                                                     
 AEROPOSTALE, INC.                                                                                                                            
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND                                                                                              
 SELECTED STORE DATA                                                                                                                          
 (In thousands, except per share and store data)                                                                                              
 (Unaudited)                                                                                                                                  
                                                                                                                                     
                                                                  53 weeks ended                        52 weeks ended                   
                                                                  February 2, 2013                      January 28, 2012                 
                                                                                     % of sales                          % of sales  
 Net sales                                                     $  2,386,178          100.0%        $  2,342,260          100.0%      
                                                                                                                                     
 Cost of sales (including certain buying, occupancy and           1,796,821          75.3%            1,733,916          74.0%       
 
warehousing expenses)  1                                                                                                           
                                                                                                                                     
 Gross profit                                                     589,357            24.7%            608,344            26.0%       
                                                                                                                                     
 Selling, general and administrative expenses                     529,846            22.2%            494,829            21.1%       
                                                                                                                                     
 Income from operations                                           59,511             2.5%             113,515            4.9%        
                                                                                                                                     
 Interest expense, net                                            485                0.0%             417                0.0%        
                                                                                                                                     
 Income before income taxes                                       59,026             2.5%             113,098            4.9%        
                                                                                                                                     
 Income taxes                                                     24,103             1.0%             43,583             1.9%        
                                                                                                                                     
 Net income                                                    $  34,923             1.5%          $  69,515             3.0%        
                                                                                                                                     
 Basic earnings per share                                      $  0.44                             $  0.86                           
                                                                                                                                     
 Diluted earnings per share                                    $  0.43                             $  0.85                           
                                                                                                                                     
 Weighted average basic shares                                    80,069                              81,208                         
                                                                                                                                     
 Weighted average diluted shares                                  80,494                              81,811                         
                                                                                                                                     
 STORE DATA:                                                                                                                         
                                                                                                                                     
 Comparable sales change (including e-commerce channel)           -2%                                 -8%                            
                                                                                                                                     
 Comparable store sales change (excluding e-commerce channel)     -4%                                 -9%                            
                                                                                                                                     
 Average square footage during period                             3,998,361                           3,832,580                      
                                                                                                                                     
                                                                                                                                     
 1Cost of sales for fiscal 2012 was unfavorably impacted by store asset impairment charges of $32.6 million ($19.7 million after tax, or $0.25 per diluted share) recorded during the fourth quarter.  Cost of sales for fiscal 2011 was unfavorably impacted by store asset impairment charges of $14.8 million ($9.1 million after tax, or $0.11 per diluted share) recorded during the fourth quarter.  In fiscal 2011, this amount was partially offset by a favorable benefit of $8.7 million ($5.3 million after tax, or 
 $0.06 per diluted share) resulting from the resolution of a previously disclosed dispute with one of our sourcing agents that was recorded during the second quarter of fiscal 2011.  Additional store asset impairment charges of $1.2 million ($0.8 million after tax) were recorded during the third quarter of fiscal 2011. 


 EXHIBIT D                                                                                                                                                
                                                                                                                                                          
 AEROPOSTALE, INC.                                                                                                                                        
 RECONCILIATION OF NET INCOME (LOSS) AND DILUTED EARNINGS PER SHARE                                                                                       
 (In thousands, except per share data)                                                                                                                    
 (Unaudited)                                                                                                                                              
                                                                                                                                                          
 The following table presents a reconciliation of net income (loss) and diluted earnings per share ("EPS") on a GAAP basis to the non-GAAP adjusted basis discussed in this release. 
                                                                                                                                               
                                                                                                                                               
                                                   14 weeks ended                                      13 weeks ended                                  
                                                        February 2, 2013                                   January 28, 2012                          
                                                        Net Income                  Diluted EPS         Net Income                Diluted EPS  
                                                        
(Loss)                                                                                
                                                                                                                                               
 As reported                                       $    (671)                $      (0.01)         $    26,099             $      0.32         
                                                                                                                                               
 Asset impairment charges recorded during the           19,738                      0.25                9,477                     0.12         
 
fourth quarter of the respective fiscal year                                                                                                 
                                                                                                                                               
 As adjusted                                       $    19,067               $      0.24           $    35,576             $      0.44         
                                                                                                                                               
                                                   53 weeks ended                                      52 weeks ended                                  
                                                        February 2, 2013                                   January 28, 2012                          
                                                        Net Income                  Diluted EPS         Net Income                Diluted EPS  
                                                                                                                                               
 As reported                                       $    34,923               $      0.43           $    69,515             $      0.85         
                                                                                                                                               
 Asset impairment charges recorded during the           19,738                      0.25                9,082                     0.11         
 
fourth quarter of the respective fiscal year  1                                                                                              
                                                                                                                                               
 Vendor dispute resolution  2                           -                           -                   (5,345)                   (0.06)       
                                                                                                                                               
 As adjusted                                       $    54,661               $      0.68           $    73,252             $      0.90         
                                                                                                                                               
                                                                                                                                               
 1The Company recorded store asset impairment charges of $1.2 million ($0.8 million after tax) during the third quarter of fiscal 2011.                   
                                                                                                                                               
 2During the second quarter of 2011, we recorded a favorable benefit of $8.7 million ($5.3 million after tax, or $0.06 per diluted share) resulting from the resolution of a previously disclosed dispute with one of our sourcing agents. 


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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