Back to top

Analyst Blog

Aeropostale Inc. (ARO - Snapshot Report) posted disappointing first-quarter fiscal 2013 results, with a loss of 16 cents per share that plunged significantly from the earnings of 13 cents in the comparable year-ago quarter. However, it fared better than the Zacks Consensus Estimate of a loss of 18 cents per share.

Macroeconomic headwinds, adverse weather conditions hurting top line, higher promotional costs and an increased inventory level took a toll on the company’s profitability. 

Net sales waned 9% year over year to $452.3 million but came ahead of the Zacks Consensus Estimate of $451 million.

Comparable-store-sales (comps) including the e-Commerce business declined 14% during the quarter, reflecting a decline of 10% and 9% in transactions and average unit retail, respectively, partially offset by a rise of 5% in units per transaction.

Revenue from e-Commerce including the GoJane business jumped 13% year over year to $41.9 million during the quarter under review. The company’s performance at its .com business enables it to generate additional sales while broadening its existing customer base worldwide. Alongside, it boosts the visibility and reputation of Aeropostale as a global firm offering great fashion and value.

Aeropostale’s gross profit tumbled 27% to $101.4 million, whereas gross margin contracted 560 basis points to 22.4%, reflecting decreased merchandise margins and deleveraging of non-merchandise costs.

Stores Update

During the quarter, the company opened 1 Aeropostale and 24 P.S. from Aeropostale store. Alongside, it closed 3 Aeropostale stores. The company currently operates 982 Aeropostale stores and 124 P.S. from Aeropostale stores.

Balance Sheet & Guidance

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $148.4 million, with no debt and shareholders' equity of $397.6 million.

Going forward, Aeropostale stated that macro headwinds will adversely affect its margins and in turn earnings. Consequently, it expects to report loss per share in the range of 15 cents to 20 cents in the second quarter of fiscal 2013.

Other Stocks to Consider

Until any further upward revision in the Zacks Rank on Aeropostale, other apparel retailers worth considering include The Gap, Inc. (GPS - Analyst Report), The Buckle, Inc.(BKE - Snapshot Report) and American Apparel, Inc. (APP - Snapshot Report), all carrying a favorable Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
CLAYTON WIL… CWEI 117.30 +1.78%