Struggling teen-apparel retailer Aeropostale Inc. (ARO), Wednesday said its third-quarter loss widened from a year ago, as revenues and margins continued to plunge. Loss for the quarter was in line with Wall Street estimates, while revenues trumped expectations.
Nevertheless, the retailer detailed a weak earnings outlook for the holiday quarter, dragging its shares down 8 percent in after hours trade on the New York Stock Exchange.
New York-based Aeropostale's third-quarter loss widened to $52.3 million or $0.66 per share from last year's loss of $25.6 million or $0.33 per share.
Adjusted loss, which excludes special items, for the quarter was $35.2 million or $0.45 per share. On average, 23 analysts polled by Thomson Reuters expected a loss of $0.45 per share for the second quarter. Analysts' estimates typically exclude special items.
Aeropostale's net sales for the third quarter dropped to $452.9 million from $514.6 million last year. Analysts had a consensus revenue estimate of $444.73 million for the quarter.
Same-store sales, including the e-commerce channel, for the quarter decreased 11 percent. Gross margin, or percentage of sales left after deducting cost of sales, dropped significantly to 15.2 percent from 17.1 percent last year.
Looking forward to the fourth quarter, the company expects a loss of $0.37 to $0.44 per share. Analysts currently estimates a loss of $0.36 per share for the quarter.
"We have made small but measurable steps in the right direction, which led to third quarter results that were in line with our guidance. We ended the quarter with inventories well-controlled, positioning us appropriately as we progress through the fourth quarter," said CEO Julian Geiger.
ARO closed Wednesday's trading at $3.19, up $0.12 or 3.91%. The stock, however, slipped $0.25 or 7.84% in after-hours trade.
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