(Reuters) - Teen clothing retailer Aeropostale Inc ARO.N on Thursday forecast a loss and a sharp drop in sales for the current quarter, blaming the ongoing need to slash prices and a weak economy.
Shares fell 6.7 percent to $13.60 in afterhours trading.
Aeropostale reported a net loss of $671,000 or 1 cent per share, for the 14 weeks ended February 2, compared with a profit of $26.1 million or 32 cents per share for the year-earlier period, which included one less week.
Sales fell 1 percent to $797.7 million for the quarter that included the holiday season, while same-store sales fell 8 percent.
The company expects the pressure to slash prices to clear shelves of unsold merchandise to continue, and forecast a first-quarter loss of 15 to 20 cents per share. On a conference call, an executive said that assumed a double-digit comparable sales decline.
Wall Street analysts were expecting a profit of 8 cents per share, according to Thomson Reuters I/B/E/S.
Wardrobe staples like graphic T-shirts and fleece during cold weather account for the lion’s share of teen clothing inventories and Aeropostale has had a tough time selling those.
Even its better performing rivals, American Eagle and Abercrombie gave soft first quarter forecasts, and projected comparable sales declines.
Retailers that cater to young shoppers on limited budgets, or those who depend on getting an allowance from parents, typically are among the first to feel any pullback from customers hit by a tough economic climate.
Many Americans are dealing with smaller take home pay because of higher payroll taxes as well as tax refunds that have come later this year than last.
Reporting by Phil Wahba in New York; editing by Matthew Lewis and Andrew Hay