Aeropostale Expects Larger Q2 Losses

Aeropostale Expects Larger Q2 Losses

Lower-than-expected sales and margins have caused apparel retailer Aeropostale to expect a larger loss than its earlier second-quarter guidance, the company announced today.

Aeropostale now expects its second-quarter loss to be between $0.42 and $0.44 per share. Its original second-quarter guidance had its losses in the $0.15 to $0.20 per share range.

The greater losses came about, the company said, partly because of additional charges totaling approximately $0.19 per share, which included a lower-than-expected tax benefit, store asset impairment charges, and retirement features of its stock-based compensation plan.

There was also a decrease in net sales by 6% to $454 million, and comparable sales decreased by 15% for the quarter, compared to the same period last year.

CEO Thomas P. Johnson said in the company's statement, "During the second quarter, we continued to experience the challenging trends we faced in the first quarter. Our performance was driven by an increase in promotional activity as we navigated through balancing our assortment, weak traffic trends and a challenging retail environment, particularly during the July selling period." The teen-oriented-clothing retailer had to mark down more clothing.

Aeropostale expects to announce its second-quarter earnings on Thursday, Aug. 22.

Back-to-school is the second-biggest shopping period of the year after the holiday season and so far it is off to a rocky start for teen retailers. On Tuesday, Aeropostale rival American Eagle Outfitters slashed its second-quarter earnings outlook because of weak sales during the April-to-June quarter.

-- Material from The Associated Press was used in this report.


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