US: Aeropostale swings to Q3 loss of $25.6m
- Q3 loss of $25.6m, compared to income $24.9m income
- Sales fell 15% to $514.6m from $605.9m
- Comparable sales declined 15%
Struggling teen apparel retailer Aeropostale remains cautious in its outlook after swinging to a net loss during the third quarter, weighed down by lower sales.
CEO Thomas Johnson said the 15% decline in comparable sales was in-line with its year-to-date trend, and the company was more promotional than anticipated to strengthen its inventory position going into the fourth quarter.
"We took an important step forward in the transformation of our brand with newness across our full merchandise assortment in the third quarter," he said.
"However, we were disappointed in our overall performance as customer adoption is occurring more slowly than we would like against the backdrop of a challenging teen retail environment."
The company expects to post a fourth-quarter loss of $0.24-0.32 per diluted share, compared to adjusted earnings of $0.24 per diluted share last year.
"While we were encouraged with an improvement in trends over the critical Black Friday holiday weekend, versus our third quarter run rate, we believe it is prudent to be cautious with our outlook for the remainder of the holiday period given heightened promotional levels and inconsistent mall traffic trends," Johnson said.
"As you know, the entire organization is working diligently and with a sense of urgency on transforming our brand and our business."
Aeropostale adopted a so-called 'poison pill' stockholder rights plan last month, after shareholder Crescendo Partners urged the retailer to sell, arguing that its turnaround efforts would be more successful as a private company.
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Teen apparel retailer Aeropostale suffered from weak retail traffic and "significant self-inflicted merchandise misses" in the first quarter, sending losses soaring....
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