Teen apparel retailer Aeropostale Inc (ARO.N) on Thursday forecast a deep third quarter loss, and said the highly promotional environment that has led it to cut prices and decimated earnings would continue in the back-to-school shopping period.
Aeropostale also said it now plans to close 30 to 40 stores this year, comp rated to an earlier plan to close 15 to 20.
Aeropostale is projecting a net loss of 21 cents to 26 cents per share for the third quarter.
The company has been trying to offer more fashionable products in addition to its standard hoodies, jeans and t-shirts, and CEO Thomas Johnson said the results were "particularly disappointing" given those efforts.
Shares were down 8.2 percent at $10.07 in after-hours trading. They closed down 1.6 percent on Thursday.
The company reported a net loss of $33.7 million, or 43 cents per share, in the quarter ended August 3, compared with a profit of $71,000 million, or nil per share, a year ago.
Its adjusted loss per share was 34 cents, deeper than the 24 cents expected by Wall Street analysts, according to Thomson Reuters I/B/E/S.
The company's gross profit margin fell 7.4 percentage points to 17.9 percent sales, as deep price cuts decimated its results.
Two weeks ago, the retailer preannounced its sales results and said comparable sales, including e-commerce, fell 15 percent in the second quarter. Overall sales fell 6.4 percent to $454 million.