(Reuters) - Clothes retailer Aeropostale Inc ARO.N reported a lower quarterly profit in line with analyst estimates as increased product costs offset higher-than-expected sales.
CEO Thomas Johnson said trends were improving from the holiday period, when it discounted more than rivals Abercrombie & Fitch (ANF.N) and American Eagle Outfitters Inc (AEO.N), but warned that the retail environment was still “uncertain”.
Aeropostale said it expects a second-quarter profit of 3 cents to 5 cents per share. Analysts on average were looking for 5 cents per share, according to Thomson Reuters I/B/E/S.
First-quarter net income fell to $10.6 million, or 13 cents per share, from $16.4 million, or 20 cents per share, a year earlier.
Sales rose 6 percent to $497.2 million.
Analysts had expected earnings of 13 cents a share, before special items, on revenue of $467.8 million.
Gross margin fell to 28 percent from 29 percent in the year-earlier period, due to higher costs of raw materials.
Abercrombie & Fitch also posted a sharp drop in profit on Wednesday, but unlike Aeropostale, its sales was below estimates.
The spring quarter was expected to be a strong season for clothes retailers, as youngsters get ready for the summer.
Aeropostale shares were volatile in post-market trading. They were up slightly after falling over 5 percent. The stock closed at $17.71 on Thursday on the New York Stock Exchange. (Reporting by Mihir Dalal in Bangalore and Nivedita Bhattacharjee in Chicago; Editing by Don Sebastian)