Press release from PR Newswire
Aeropostale Reports Results For Third Quarter Of Fiscal 2012
Wednesday, November 28, 2012
Aeropostale Reports Results For Third Quarter Of Fiscal 201216:01 EST Wednesday, November 28, 2012Third Quarter Earnings of $0.31 Per Diluted Share Provides Fourth Quarter GuidanceNEW YORK, Nov. 28, 2012 /PRNewswire/ -- Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual apparel for young women and men, today reported results for the third quarter of fiscal 2012, and provided guidance for the fourth quarter of fiscal 2012. Third Quarter PerformanceDiluted net earnings for the third quarter of 2012 were $0.31 per share, compared to $0.30 per diluted share in the same period last year. Net income for the third quarter of 2012 was $24.9 million, compared to net income of $24.1 million last year. For the third quarter of fiscal 2012, net sales increased 2% to $605.9 million, from $596.5 million in the year ago period. Comparable sales, including the e-commerce channel, for the third quarter decreased 1% compared to a 7% decrease last year. Comparable store sales, excluding the e-commerce channel, for the third quarter decreased 2%, compared to a 9% decrease last year. Thomas P. Johnson, Chief Executive Officer, commented, "For the third quarter, we achieved net earnings slightly ahead of our previously issued guidance. Although we experienced pressure on our women's core basics business, she responded positively to our fashion offering. In addition, our men's and accessories businesses performed well."E-commerceNet revenue from the Company's e-commerce business for the third quarter of fiscal 2012 increased 12% to $51.1 million, from $45.7 million in the year ago period. Cash Position and Share Repurchase ProgramThe Company ended the quarter with cash and cash equivalents of $184.5 million and no debt. During the third quarter of fiscal 2012, the Company repurchased approximately $40.8 million, or 3.0 million shares of common stock. The Company currently has $104.4 million of availability remaining under its share repurchase program.Store Growth and Capital SpendingThe Company opened five Aeropostale and five P.S. from Aeropostale stores, and closed two Aeropostale and two temporary P.S. from Aeropostale stores during the quarter. For the third quarter, the Company invested $15.9 million in planned capital expenditures.Fourth Quarter GuidanceThe Company announced earnings guidance for the fourth quarter of fiscal 2012. The Company expects adjusted earnings in the range of $0.36 to $0.41 per diluted share, compared to adjusted earnings of $0.44 per diluted share in the same period last year. This earnings guidance does not include the impact of any potential store asset impairment charges, and assumes an effective tax rate of approximately 43.5% versus a tax rate of 35.9% last year.Mr. Johnson continued, "While our performance over the Black Friday weekend was encouraging, the environment during the first few weeks of November was challenging. As a result, we continue to be cautious for the remainder of the quarter given the inconsistency we are seeing in our business against the backdrop of a highly promotional environment. We will continue to focus on delivering on our strategic initiatives, managing our business conservatively, and ending the quarter with inventories well-controlled."Use of Non-GAAP MeasuresThe Company believes that the disclosure of adjusted net income and adjusted earnings per diluted share, which are non-GAAP financial measures, provides investors with useful information to help them better understand the Company's results (see Exhibit D).Conference Call InformationThe Company will be holding a conference call today at 4:15 P.M EST to review its third quarter results. The broadcast will be available through the 'Investor Relations' link at www.aeropostale.com and www.fulldisclosure.com. To listen to the broadcast your computer must have Windows Media Player installed. If you do not have Windows Media Player go to the latter site prior to the call, where you can download the software for free.About Aeropostale, Inc.Aeropostale®, Inc. is a primarily mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aeropostale® stores and 4 to 12 year-old kids through its P.S. from Aeropostale® stores. The Company provides customers with a focused selection of high quality fashion and fashion basics at compelling values in an innovative and exciting store environment. Aeropostale® maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise. Aeropostale® products can only be purchased in Aeropostale® stores and online at www.aeropostale.com. P.S. from Aeropostale® products can be purchased in P.S. from Aeropostale® stores and online at www.ps4u.com and www.aeropostale.com. The Company currently operates 916 Aeropostale® stores in 50 states and Puerto Rico, 78 Aeropostale stores in Canada and 99 P.S. from Aeropostale® stores in 20 states. In addition, pursuant to various licensing agreements, our licensees currently operate 28 Aeropostale® and P.S. from Aeropostale® stores in the Middle East, Asia and Europe. On November 13, 2012, Aeropostale, Inc. acquired substantially all of the assets of online women's fashion footwear and apparel retailer GoJane.com, Inc. Based in Ontario, California, GoJane focuses primarily on fashion footwear, with a select offering of contemporary apparel and other accessories.SPECIAL NOTE: THIS PRESS RELEASE AND ORAL STATEMENTS MADE FROM TIME TO TIME BY REPRESENTATIVES OF THE COMPANY CONTAIN CERTAIN "FORWARD-LOOKING STATEMENTS" CONCERNING EXPECTATIONS FOR SALES, STORE OPENINGS, GROSS MARGINS, EXPENSES, STRATEGIC DIRECTION AND EARNINGS. ACTUAL RESULTS MIGHT DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO MATERIALLY DIFFER INCLUDE, CHANGES IN THE COMPETITIVE MARKETPLACE, INCLUDING THE INTRODUCTION OF NEW PRODUCTS OR PRICING CHANGES BY OUR COMPETITORS, CHANGES IN THE ECONOMY AND OTHER EVENTS LEADING TO A REDUCTION IN DISCRETIONARY CONSUMER SPENDING; SEASONALITY; RISKS ASSOCIATED WITH CHANGES IN SOCIAL, POLITICAL, ECONOMIC AND OTHER CONDITIONS AND THE POSSIBLE ADVERSE IMPACT OF CHANGES IN IMPORT RESTRICTIONS; RISKS ASSOCIATED WITH UNCERTAINTY RELATING TO THE COMPANY'S ABILITY TO IMPLEMENT ITS GROWTH STRATEGIES, AS WELL AS THE OTHER RISK FACTORS SET FORTH IN THE COMPANY'S FORM 10-K AND QUARTERLY REPORTS ON FORM 10-Q, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR CIRCUMSTANCES. EXHIBIT AAEROPOSTALE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)(Unaudited)October 27, 2012January 28, 2012October 29, 2011ASSETSCurrent Assets: Cash and cash equivalents $184,456$223,712$109,379 Merchandise inventory 277,440163,522265,133 Other current assets 64,57854,56567,500 Total current assets 526,474441,799442,012Fixtures, equipment and improvements, net 298,915287,393313,483Other assets 4,0576,0415,830TOTAL ASSETS $829,446$735,233$761,325LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities: Accounts payable $178,523$103,476$171,592 Accrued expenses 107,37789,73577,701 Total current liabilities 285,900193,211249,293Other non-current liabilities 134,752132,588129,834Stockholders' equity 408,794409,434382,198TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $829,446$735,233$761,325EXHIBIT BAEROPOSTALE, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME ANDSELECTED STORE DATA (In thousands, except per share and store data)(Unaudited)13 weeks endedOctober 27, 2012October 29, 2011% of sales% of salesNet sales $605,918100.0%$596,506100.0%Cost of sales (including certain buying, occupancy and warehousing expenses) 436,91172.1%434,98572.9%Gross profit 169,00727.9%161,52127.1%Selling, general and administrative expenses 126,51420.9%121,79320.4%Income from operations 42,4937.0%39,7286.7%Interest expense, net 390.0%1850.0%Income before income taxes 42,4547.0%39,5436.7%Income taxes 17,5072.9%15,4352.7%Net income $24,9474.1%$24,1084.0%Basic earnings per share $0.31$0.30Diluted earnings per share $0.31$0.30Weighted average basic shares 79,83380,741Weighted average diluted shares 80,13681,068STORE DATA:Comparable sales change (including e-commerce channel) -1%-7%Comparable store sales change (excluding e-commerce channel) -2%-9%Stores open at end of period 1,0911,055Total square footage at end of period 4,033,8203,886,083Average square footage during period 4,027,3373,862,152EXHIBIT CAEROPOSTALE, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME ANDSELECTED STORE DATA (In thousands, except per share and store data)(Unaudited)39 weeks endedOctober 27, 2012October 29, 2011% of sales% of salesNet sales $1,588,469100.0%$1,533,880100.0%Cost of sales (including certain buying, occupancy and warehousing expenses) 1,157,68072.9%1,121,66673.1%Gross profit 430,78927.1%412,21426.9%Selling, general and administrative expenses 371,01223.4%339,52422.1%Income from operations 59,7773.7%72,6904.7%Interest expense, net 3460.0%3000.0%Income before income taxes 59,4313.7%72,3904.7%Income taxes 23,8371.5%28,9741.9%Net income $35,5942.2%$43,4162.8%Basic earnings per share $0.44$0.53Diluted earnings per share $0.44$0.53Weighted average basic shares 80,71481,358Weighted average diluted shares 81,15781,924STORE DATA:Comparable sales change (including e-commerce channel) 1%-8%Comparable store sales change (excluding e-commerce channel) -1%-10%Average square footage during period 3,981,6703,806,693EXHIBIT DAEROPOSTALE, INC.RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE(In thousands, except per share data)(Unaudited)The following table presents a reconciliation of net income and diluted earnings per share ("EPS") on a GAAP basis to the non-GAAP adjusted basis discussed in this release. 39 weeks endedOctober 27, 2012October 29, 2011Net IncomeDiluted EPSNet IncomeDiluted EPSAs reported $35,594$0.44$43,416$0.53Vendor dispute resolution1 --(4,700)(0.06)As adjusted $35,594$0.44$38,716$0.471During the second quarter of 2011, we recorded a favorable pre-tax benefit of $8.7 million, resulting from the resolution of a previously disclosed dispute with one of our sourcing agents. Of this benefit, $8.0 million related to periods prior to fiscal 2011. Company Contact: Kenneth Ohashi/VP, Investor & Media Relations (646) 452-1876 or email@example.comMedia Contact: Leigh Parrish, FTI Consulting(212) 850-5651SOURCE Aeropostale, Inc.