Friday, March 4, 2011

Aeropostale (NYSE: ARO): Q4 Earnings Preview 2010

Aeropostale, Inc. (NYSE: ARO) is scheduled to release its fourth-quarter earnings after the closing bell on Thursday, March 10, 2011. Analysts, on average, expect the company to report earnings of 97 cents per share on revenue of $838.22 million. In the year ago quarter, the company reported earnings of 99 cents per share on revenue of $801.22 million.

Aeropostale is a mall-based, specialty retailer of casual apparel and accessories and is currently operational with 906 Aeropostale stores in 49 states and Puerto Rico, 59 Aeropostale stores in Canada and 47 P.S. from Aeropostale stores in 13 states.

In the preceding third quarter, the New York-based company's net income was $58.5 million or $0.63 per share, compared to $62.6 million or $0.61 per share for the year-ago quarter. Revenue rose 6% to $602.76 million from $567.84 million. Analysts, on average, expected the company to report earnings of $0.66 per share on revenue of $605.98 million. 

For the fourth quarter quarter, sames store sales was down 3%, while the equivalent prior year period recorded an increase of 9%. Net sales for the quarter increased 5% to $838.9 million, up from $801.2 million in the prior year.

Early in February, the company boosted its fourth quarter earnings per share outlook to a range of $0.96 to $0.97, while its previous expectation was in a range of $0.94 to $0.96.

The apparel retailer has benefited from stong hioliday season. Thecompany used various promotional measures as a weapon to regain the lost market share and to survive in the highly competitive holiday selling season.

The company is seeking to further optimize its supply chain, thereby improving operational efficiency. However, increasing raw material prices and a prolonged weakness in consumer spending remain concerns. Also, Aeropostale operates in a highly fragmented specialty retail sector and faces intense competition from other teenage-focused retailers, such as Abercrombie & Fitch Co. (NYSE: ANF) and Gap Inc. (NYSE: GPS).

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