US: Aeropostale to close more stores on likely Q3 loss
- Q2 net loss of $33.7m from profit of $71,000
- Sales fell 6% to $454m from $485.3m
- Comparable sales declined 15%
- Gross profit dropped to 17.9% from 25.3%
Teen clothing retailer Aeropostale says it expects to post a third quarter loss and will close more stores than originally forecast, after high promotional activity weighed on second quarter sales and deepened losses.
CEO Thomas Johnson said: "As previously reported, our second quarter results did not change materially from earlier in the year. Our business was pressured by a challenging teen retail environment with weak traffic trends and high levels of promotional activity.
"Our results were particularly disappointing given the level of change we have registered with the Aeropostale brand in recent periods."
The company expects to report a loss of $0.21-0.26 per share in the third quarter, down from earnings of $0.31 per share last year. It also plans to close 30-40 stores during fiscal 2013, compared to its previous guidance of 15-20.
"Our negative outlook for the third quarter reflects the challenges of a highly promotional and competitive teen retail environment which we expect will continue," Johnson added.
"As we navigate the current environment, we will continue to focus on our strategic initiatives of further refining our merchandise mix and communicating the changes we have made to our brand through marketing. We are committed to turning our business around and remain focused on shifting brand perception and recapturing market share."
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