(Reuters) - Teen apparel retailer Aeropostale Inc ARO.N reported a loss for the 11th straight quarter as it discounted heavily to clear older inventory and closed many unprofitable stores.
Shares of the company, which also reported lower-than-expected quarterly sales, fell about 5 percent in extended trading on Thursday.
Aeropostale, like some other teen apparel retailers, has been losing customers to “fast-fashion” chains such as H&M (HMb.ST), Forever 21 and Inditex’s (ITX.MC) Zara and sportswear makers such as Nike Inc (NKE.N) and Under Armour Inc (UA.N).
The mall-based retailer offered heavy discounts on older merchandise to make way for newer and trendier styles for the crucial back-to-school shopping season, Chief Executive Julian Geiger said on a conference call.
“We are encouraged by our progress during the initial part of the back-to-school season, especially the significant improvement in our girls business,” Geiger said in a statement.
Aeropostale’s comparable sales, including its e-commerce channel, fell 8 percent in the second quarter. The company had 826 stores in North America as of Aug. 1 compared with about 1,070 stores a year earlier.
Aeropostale forecast a loss of 30-38 cents per share for the third quarter. Analysts on average were expecting a loss of 31 cents per share, according to Thomson Reuters I/B/E/S.
The retailer’s net loss narrowed to $43.7 million, or 55 cents per share, in the quarter ended Aug. 1 from $63.8 million, or 81 cents per share, a year earlier.
Excluding items, the company had a loss of 56 cents per share, bigger than the 55 cents analysts had expected.
Revenue fell 17.5 percent to $326.9 million, missing the average analyst estimate of $335.7 million.
Aeropostale’s shares were trading at $1.20 after the bell. Up to Thursday’s close, the stock had nearly halved in value this year.
Reporting by Ramkumar Iyer in Bengaluru; Editing by Kirti Pandey