Aeropostale Reports Record Third Quarter 2010 and November Sales Results
NEW YORK, Dec. 1, 2010 /PRNewswire-FirstCall/ — Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of active and casual apparel for young women and men, today reported results for the third quarter ended October 30, 2010 and total net sales for the four-week period ended November 27, 2010.
Third Quarter Results
Diluted net earnings for the third quarter of fiscal 2010 were $0.63 per diluted share, which includes a previously disclosed after-tax charge of approximately $3.9 million, or $0.04 per diluted share, resulting from the related third quarter retirement plan payment to its Chairman and former Chief Executive Officer. The Company reported net earnings of $0.61 per diluted share in the third quarter last year.
For the third quarter of fiscal 2010, total net sales increased 6% to $602.8 million, from $567.8 million in the year ago period. Same store sales for the third quarter were essentially flat, compared to a same store sales increase of 10% last year. Total net sales for the Company’s e-commerce business for the third quarter of fiscal 2010 increased 17% to $38.3 million, from $32.6 million in third quarter last year.
Thomas P. Johnson, Chief Executive Officer, said, “We are very pleased to deliver third quarter earnings at the high-end of our initial guidance. Our ability to navigate effectively through the challenging and promotional environment truly underscores the power and flexibility of our promotional specialty store model.”
November Sales Results
Total net sales for the four-week period ended November 27, 2010 increased 7% to $243.8 million, from $228.0 million for the four-week period ended November 28, 2009. The Company’s same store sales decreased 1% for the month, compared to a same store sales increase of 7% in the year ago period.
The Company stated that it experienced a mid-single digit same store sales increase on the Friday after Thanksgiving Day. The Company also stated, however, that sales trends decelerated significantly for the remainder of the Thanksgiving Day weekend.
Fourth Quarter Guidance
The Company announced its earnings guidance for the fourth quarter of fiscal 2010. The Company expects earnings in the range of $0.94 to $0.96 per diluted share for the fourth quarter. The Company achieved diluted earnings per share of $0.99 in the fourth quarter last year.
Store Growth and Capital Spending for Fiscal 2011
For fiscal 2011 the Company plans to invest approximately $70.0 million to open approximately 30 Aeropostale stores, approximately 20 P.S. from Aeropostale stores, approximately 50 store remodels, in addition to certain information technology investments. This compares to capital expenditures of approximately $96.0 million in fiscal 2010.
Discontinuation of Monthly Sales Reporting
Beginning in Fiscal 2011, the Company will discontinue monthly sales reporting. Sales and earnings will be reported in conjunction with the quarterly earnings announcement.
Conference Call Information
The Company will be holding a conference call today at 4:15 P.M. EST to review its third 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.
Aeropostale, Inc. is a 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 7 to 12 year-old kids through its P.S. from Aeropostale(TM) stores. The Company provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values. 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 its Aeropostale stores and online at www.aeropostale.com. P.S. from Aeropostale(TM) products can be purchased in P.S. from Aeropostale(TM) stores and online at www.ps4u.com. The Company currently operates 908 Aeropostale stores in 49 states and Puerto Rico, 59 Aeropostale stores in Canada and 47 P.S. from Aeropostale stores in 13 states.
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
EXHIBIT A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
October 30, January 30, October 31,
2010 2010 2009
--- ---- ----
ASSETS
Current Assets:
Cash and cash equivalents $239,457 $346,976 $285,627
Merchandise inventory 239,391 132,915 221,516
Other current assets 68,098 50,126 43,236
------ ------ ------
Total current assets 546,946 530,017 550,379
Fixtures, equipment and improvements,
net 293,409 251,558 262,331
Other assets 7,009 10,734 16,128
----- ------ ------
TOTAL ASSETS $847,364 $792,309 $828,838
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $142,572 $90,850 $144,564
Accrued expenses 90,537 150,990 122,052
------ ------- -------
Total current liabilities 233,109 241,840 266,616
Other non-current liabilities 117,637 115,980 113,773
Stockholders' equity 496,618 434,489 448,449
------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $847,364 $792,309 $828,838
======== ======== ========
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
13 weeks ended
--------------
October 30, 2010 October 31, 2009
---------------- ----------------
% of % of
sales sales
----- -----
Net sales $602,756 100.0% $567,838 100.0%
Cost of sales (including
certain buying,
occupancy and
warehousing expenses) 382,169 63.4 344,921 60.7
------- ---- ------- ----
Gross profit 220,587 36.6 222,917 39.3
Selling, general and
administrative expenses 124,285 20.6 117,236 20.6
------- ---- ------- ----
Income from operations 96,302 16.0 105,681 18.7
Interest (expense) income (10) 0.0 27 0.0
--- --- --- ---
Income before income
taxes 96,292 16.0 105,708 18.7
Income taxes 37,757 6.3 43,079 7.6
------ --- ------ ---
Net income $58,535 9.7% $62,629 11.1%
======= === ======= ====
Basic earnings per share $0.64 $0.62
===== =====
Diluted earnings per
share $0.63 $0.61
===== =====
Weighted average basic
shares 91,954 100,322
Weighted average diluted
shares 92,916 101,987
STORE DATA:
Comparable store sales
increase 0% 10%
Stores open at end of
period 1,002 945
Total square footage at
end of period 3,635,623 3,398,307
Average square footage
during period 3,596,645 3,380,722
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
39 weeks ended
--------------
October 30, 2010 October 31, 2009
---------------- ----------------
% of
% of sales sales
---------- -----
Net sales $1,561,103 100.0% $1,428,882 100.0%
Cost of sales (including
certain buying,
occupancy and
warehousing expenses) 973,067 62.3 892,383 62.5
------- ---- ------- ----
Gross profit 588,036 37.7 536,499 37.5
Selling, general and
administrative expenses 345,115 22.1 312,964 21.9
------- ---- ------- ----
Income from operations 242,921 15.6 223,535 15.6
Interest (expense) income (50) 0.0 153 0.0
--- --- --- ---
Income before income
taxes 242,871 15.6 223,688 15.6
Income taxes 95,352 6.1 90,795 6.4
------ --- ------ ---
Net income $147,519 9.5% $132,893 9.2%
======== === ======== ===
Basic earnings per share $1.58 $1.32
===== =====
Diluted earnings per
share $1.57 $1.30
===== =====
Weighted average basic
shares 93,113 100,683
Weighted average diluted
shares 94,150 102,039
STORE DATA:
Comparable store sales
increase 3% 11%
Average square footage
during period 3,520,770 3,333,693
Company Contact:
----------------
Kenneth Ohashi/VP, Investor & Media Relations
(646) 452-1876 or kohashi@aeropostale.com
Media Contact:
--------------
Leigh Parrish/Melissa Kahaly, FD
(212) 850-5600
SOURCE Aeropostale, Inc.