Aeropostale Inc (NYSE:ARO) Hit 52-Week Low On Concerns Surrounding Diminishing Sales


Dallas, Texas 12/09/2014 (FINANCIALSTRENDS) – Aeropostale Inc (NYSE:ARO) hit new 52-week low of $2.17. The stock has lost over 35% since its 3Q14 results announcement earlier this month and about 75% over the trailing twelve months.

The company recently reported a net loss of $52.3 million or $0.66 per diluted share for 3Q14, which almost doubled from net loss of $25.6 million in 3Q13. This was triggered by the company’s diminishing sales performance with net sales declining 12% to $452.9 million and comparable sales declining 11% during 3Q14.

Aeropostale reported cash and cash equivalents of $109.19 million and long-term debt of $136.0 million at the end of 3Q14.

Fourth Quarter Outlook

Julian R. Geiger, CEO of Aeropostale Inc (NYSE:ARO), said that the management understands what is going wrong with the business and we have the resources to fix the same. The company is repositioning itself with changes in organizational structure, assortment planning and allocation and brand positioning. The company has a history of overcoming adversity and it is clearly working to return to profitability.

The company expects 4Q14 operating losses to be between $28 to $34 million and net loss to be in the range of $0.37 to $0.44 per diluted share.

Management Discussion & Analysis

Aeropostale Inc (NYSE:ARO)’s Board of Directors have already approved a comprehensive plan to restructure the P.S. from Aeropostale business. The plan was approved following the assessment of changing consumer patterns. The company expects to generate approximately $30 to $35 million in annualized pre-tax savings, of which $5 to $10 million are expected during FY14, through implementation of key initiatives.

The management is also working on key financial strategies to optimize real estate portfolio, capital spending and ensure appropriate liquidity. Earlier in 2014, the company increased its revolving credit facility from $175 million to $230 million.

The management is focused on executing key operational and financial initiatives to improve the performance within the challenging U.S. macro-economic environment.

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