Aeropostale Reports Results for Fourth Quarter and Fiscal 2010
NEW YORK, March 10, 2011 /PRNewswire/ — Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual apparel for young women and men, today reported results for the fourth quarter and fiscal 2010, as well as provided guidance for the first quarter and full year fiscal 2011.
Fourth Quarter Performance
Diluted net earnings for the fourth quarter of fiscal 2010 were $0.95 per diluted share, including $0.03 per share unfavorable impact due to a higher than expected effective tax rate. The Company reported net earnings of $0.99 per diluted share in the fourth quarter last year.
For the fourth quarter of fiscal 2010, net sales increased 5% to $839.3 million, from $801.2 million in the year ago period. Same store sales for the fourth quarter decreased 3%, compared to a same store sales increase of 9% last year.
Full Fiscal Year Performance
Diluted net earnings for fiscal 2010 were $2.49 per share, including the aforementioned $0.03 per share impact due to a higher than expected effective tax rate and a previously disclosed after tax charge of $0.04 per diluted share resulting from the third quarter retirement plan payment to the Company’s Chairman and former Chief Executive Officer. The Company reported net earnings of $2.27 per share in the same period last year.
Net sales for fiscal 2010 increased 8% to $2.400 billion, from $2.230 billion in the year ago period. Same store sales for fiscal 2010 increased 1%, compared to a same store sales increase of 10% last year.
Thomas P. Johnson, Chief Executive Officer, commented, “In 2010 the Aeropostale brand continued to build momentum and popularity, we opened our flagship Times Square store, and we continued the roll-out of our children’s concept ‘P.S. from Aeropostale.’ While we are proud of our many accomplishments, our performance in the back-half was below our expectations. The teen retail environment was highly promotional and we believe that we did not execute to our full potential. Moving into 2011, we recognize our opportunities and are more determined than ever to show the power of the Aeropostale brand.”
First Quarter and Full Year 2011 Guidance
For the first quarter of fiscal 2011, the Company expects earnings in the range of $0.35 to $0.38 per share, compared to earnings of $0.48 per share last year. For the full year, the Company expects net earnings in the range of $2.20 to $2.40 per diluted share.
Mr. Johnson, continued, “Our outlook for the first quarter reflects the impact from clearing through holiday inventories, and our outlook for the full year reflects industry wide inflationary pressures. As we look forward into 2011, we recognize that the entire sector faces near term challenges. We are, however, focused on leveraging our flexible promotional business model to navigate through the current environment and delivering on our initiatives to position ourselves for future growth.”
E-commerce
Net sales from the Company’s e-commerce business for the fourth quarter of fiscal 2010 increased 21% to $77.3 million, from $63.8 million in the year ago period. Net sales from the Company’s e-commerce business for fiscal 2010 increased 24% to $160.2 million, from $129.0 million in the year ago period.
Share Repurchase Program
The Company repurchased 10.3 million shares of common stock for $257.5 million during fiscal 2010. As of January 29, 2011 the Company had $245.3 million of remaining buyback availability under the $1.15 billion share repurchase program.
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, and remodel approximately 50 stores, in addition to certain information technology investments. This compares to capital expenditures of approximately $100.8 million in fiscal 2010.
Conference Call Information
The Company will be holding a conference call today at 4:15 P.M. EDT to review its fourth 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.
About Aeropostale, Inc.
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 906 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 OR CIRCUMSTANCES.
Company Contact:
----------------
Kenneth Ohashi/VP, Investor & Media Relations
(646) 452-1876 or kohashi@aeropostale.com
Media Contact:
--------------
Leigh Parrish, FD
(212) 850-5600
EXHIBIT A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
January 29, January 30,
----------- -----------
2011 2010
---- ----
ASSETS
Current Assets:
Cash and cash equivalents $265,553 $346,976
Merchandise inventory 156,596 132,915
Other current assets 47,398 50,126
------ ------
Total current assets 469,547 530,017
Fixtures, equipment and improvements, net 299,242 251,558
Other assets 17,061 10,734
------ ------
TOTAL ASSETS $785,850 $792,309
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $103,014 $90,850
Accrued expenses 113,167 150,990
------- -------
Total current liabilities 216,181 241,840
Other non-current liabilities 137,032 115,980
Stockholders' equity 432,637 434,489
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $785,850 $792,309
======== ========
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
13 weeks ended
--------------
January 29, 2011 January 30, 2010
---------------- ----------------
% of sales % of sales
---------- ----------
Net sales $839,331 100.0% $801,223 100.0%
Cost of sales
(including certain
buying, occupancy and
warehousing expenses) 541,205 64.5 490,575 61.2
------- ---- ------- ----
Gross profit 298,126 35.5 310,648 38.8
Selling, general and
administrative
expenses 154,253 18.4 151,498 18.9
------- ---- ------- ----
Income from operations 143,873 17.1 159,150 19.9
Interest expense (68) 0.0 (32) 0.0
--- --- --- ---
Income before income
taxes 143,805 17.1 159,118 19.9
Income taxes 59,985 7.1 62,554 7.8
------ --- ------ ---
Net income $83,820 10.0% $96,564 12.1%
======= ==== ======= ====
Basic earnings per
share $0.96 $1.00
===== =====
Diluted earnings per
share $0.95 $0.99
===== =====
Weighted average basic
shares 87,461 96,467
Weighted average
diluted shares 88,601 97,982
STORE DATA:
Comparable store sales
(decrease) increase (3)% 9%
Stores open at end of
period 1,012 952
Total square footage at
end of period 3,703,033 3,428,376
Average square footage
during period 3,711,795 3,431,716
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
52 weeks ended
--------------
January 29, 2011 January 30, 2010
---------------- ----------------
% of sales % of sales
---------- ----------
Net sales $2,400,434 100.0% $2,230,105 100.0%
Cost of sales
(including certain
buying, occupancy
and warehousing
expenses) 1,514,272 63.1 1,382,958 62.0
--------- ---- --------- ----
Gross profit 886,162 36.9 847,147 38.0
Selling, general and
administrative
expenses 499,368 20.8 464,462 20.8
------- ---- ------- ----
Income from
operations 386,794 16.1 382,685 17.2
Interest (expense)
income (118) 0.0 121 0.0
---- --- --- ---
Income before income
taxes 386,676 16.1 382,806 17.2
Income taxes 155,337 6.5 153,349 6.9
------- --- ------- ---
Net income $231,339 9.6% $229,457 10.3%
======== === ======== ====
Basic earnings per
share $2.52 $2.30
===== =====
Diluted earnings per
share $2.49 $2.27
===== =====
Weighted average
basic shares 91,700 99,629
Weighted average
diluted shares 92,762 101,025
STORE DATA:
Comparable store
sales increase 1% 10%
Average square
footage during
period 3,568,442 3,358,199
SOURCE Aeropostale, Inc.