Aeropostale, Inc. Earnings: Margins Shrink on Rising Costs, Net Income Falls

Rising costs did not help Aeropostale, Inc. (NYSE:ARO) in the first quarter as profit dropped from a year earlier. Aropostale, Inc. operates as a mall-based retailer of casual apparel and accessories for young women and men in the United States.

Don’t Miss: Wall St. Cheat Sheet’s newest Feature Trades of the Month!

Aeropostale Earnings Cheat Sheet for the First Quarter

Results: Net income for Aeropostale, Inc. fell to $16.4 million (20 cents/share) vs. $45.4 million (48 cents/share) a year earlier. A decline of 63.9% from the year earlier quarter.

Revenue: Rose 1.2% to $469.2 million YoY.

Actual vs. Wall St. Expectations: ARO fell in line with the mean analyst estimate of 20 cents/share. Estimates ranged from 20 cents per share to 22 cents per share.

Quoting Management: Thomas P. Johnson, Chief Executive Officer, commented, “Our outlook for the second quarter reflects our plans to aggressively clear through spring inventories to position ourselves appropriately for the important back to school selling season. While we are disappointed with our current performance, we are confident that our entire organization is focused on the right initiatives to regain market share. Our goals for the remainder of the year remain very clear – regain balance and clarity in our merchandise assortments, mitigate industry wide cost increases, and manage our cost structure conservatively and carefully.”

Key Stats:

Gross margin shrunk 10.3 percentage points to 29.1%. The contraction appeared to be driven by rising costs as the figure rose 18.4% from the year earlier quarter while revenue rose 1.2%.

Revenue has risen the past four quarters. Revenue increased 4.8% to $839.3 million in fourth quarter of the last fiscal year. The figure rose 6.1% in third quarter of the last fiscal year from the year earlier and climbed 9.2% in second quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In fourth quarter of the last fiscal year, net income fell 13.2% from the year earlier while the figure fell 6.5% in the third quarter of the last fiscal year.

Competitors to Watch: Pacific Sunwear of California, Inc. (NASDAQ:PSUN), Zumiez Inc. (NASDAQ:ZUMZ), Abercrombie & Fitch Co. (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), Express, Inc. (NYSE:EXPR), The Gap Inc. (NYSE:GPS), The Buckle, Inc. (NYSE:BKE), Body Central Acquisition Corp. (NASDAQ:BODY), The Wet Seal, Inc. (NASDAQ:WTSLA), and Casual Male Retail Group, Inc. (NASDAQ:CMRG).

Stock Performance: Shares of ARO are down 11% from the previous close.

Don’t Miss Wall St. Cheat Sheet’s newest Feature Trades of the Month!