Published:
Aeropostale Reports Third Quarter 2008 and November Sales Results
NEW YORK, Dec. 3 /PRNewswire-FirstCall/ -- Aeropostale, Inc. (NYSE: ARO),
a mall-based specialty retailer of active and casual apparel for young women
and men, today reported results for the third quarter ended November 1, 2008.
Third Quarter Results
Diluted earnings per share for the third quarter of fiscal 2008 increased
31% to a record $0.63 per diluted share, compared to net earnings of $0.48 per
share in the third quarter of fiscal 2007. Net income for the third quarter
increased 18% to a record $42.6 million, compared to net income of $36.0
million in the same period last year.
For the third quarter of fiscal 2008, total net sales increased 17% to
$482.0 million, from $412.6 million in the year-ago period. Same store sales
for the third quarter increased 7%, compared to an increase of 2% in the year-
ago period.
Julian R. Geiger, Chairman and Chief Executive Officer said, "We are very
pleased with the record results we generated in the third quarter. This
accomplishment was particularly impressive given the unprecedented weakness in
the macroeconomic environment. Our performance demonstrates the strength of
our brand and the flexibility and resilience of our business model."
November Sales Results
Total net sales for the four-week period ended November 29, 2008 increased
5% to $200.9 million, from $192.2 million for the four-week period ended
December 1, 2007. The Company's same store sales decreased 5% for the month,
compared to a same store sales increase of 7% in the year ago period. The
Company estimates that the timing of a later Thanksgiving holiday had a
negative mid-single digit impact on comparable store sales for the month.
Year to date total net sales have increased 17% to $1.396 billion, from
$1.192 billion in the year ago period. Year to date same store sales increased
7%, compared to essentially flat same store sales last year.
Fourth Quarter Guidance
The Company announced its earnings guidance for the fourth quarter of
fiscal 2008. The Company expects earnings in the range of $0.84 to $0.90 per
diluted share for the fourth quarter.
The Company achieved diluted earnings per share of $0.95 in the fourth
quarter last year. Results for the fourth quarter of fiscal 2007 reflected
certain special items (Exhibit D). Excluding these special items, diluted
earnings per share were $0.93 for the fourth quarter of 2007. The Company
believes that the disclosure of diluted earnings per share excluding the
special items, which is a non-GAAP financial measure, provides investors with
useful information to help them better understand the Company's results.
Mr. Geiger concluded, "As we progress through the holiday selling season,
we will continue to offer our customers the right fashion at compelling
values. We believe that the fundamentals of our business, which are
responsible for our record year-to-date results, remain strong. We are
focused on managing the business conservatively while maximizing growth
opportunities and continuing to deliver profitable performance."
Capital Expenditures
The Company expects fiscal 2009 capital expenditures of approximately $55
million, which relate to new and remodeled stores, corporate projects and IT
initiatives. The Company anticipates capital expenditures of approximately
$80 million for fiscal 2008.
Conference Call Information
The 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 mall-based, specialty retailer of casual apparel
and accessories, principally targeting 14 to 17 year-old young women and men.
The Company provides customers with a focused selection of high-quality,
active-oriented, fashion and fashion basic merchandise at compelling values.
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 its stores or on-line through its e-commerce
website (www.aeropostale.com). The Company currently operates 874 Aeropostale
stores in 48 states andPuerto Rico, 29 Aeropostale stores inCanada and 14
Jimmy'Z stores in 11 states.
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 A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
November 1, February 2, November 3,
2008 2008 2007
ASSETS
Current Assets:
Cash and cash equivalents $107,198 $111,927 $122,553
Merchandise inventory 206,857 136,488 192,301
Other current assets 45,824 36,272 33,957
Total current assets 359,879 284,687 348,811
Fixtures, equipment and
improvements, net 258,353 213,831 225,364
Other assets 20,236 15,651 9,232
TOTAL ASSETS $638,468 $514,169 $583,407
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $136,738 $99,369 $133,475
Accrued expenses 87,695 98,018 77,006
Total current liabilities 224,433 197,387 210,481
Other non-current liabilities 128,903 119,506 118,110
Stockholders' equity 285,132 197,276 254,816
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $638,468 $514,169 $583,407
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
13 weeks ended
November 1, 2008 November 3, 2007
% of sales % of sales
Net sales $482,037 100.0% $412,576 100.0%
Cost of sales (including certain
buying, occupancy and
warehousing expenses) 308,586 64.0 268,732 65.1
Gross profit 173,451 36.0 143,844 34.9
Selling, general and
administrative expenses 103,084 21.4 86,261 20.9
Income from operations 70,367 14.6 57,583 14.0
Interest income, net 210 0.0 1,989 0.4
Income before income taxes 70,577 14.6 59,572 14.4
Income taxes 27,931 5.8 23,564 5.7
Net income $42,646 8.8% $36,008 8.7%
Basic earnings per share $0.64 $0.48
Diluted earnings per share $0.63 $0.48
Weighted average basic shares 66,851 74,659
Weighted average diluted shares 67,646 75,016
STORE DATA
Comparable store sales increase 7% 2%
Stores open at end of period 905 823
Total square footage at end
of period 3,242,086 2,918,810
Average square footage
during period 3,202,710 2,886,074
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
39 weeks ended
November 1, 2008 November 3, 2007
% of sales % of sales
Net sales $1,195,514 100.0% $999,594 100.0%
Cost of sales (including
certain buying, occupancy
and warehousing expenses) 784,849 65.6 670,169 67.0
Gross profit 410,665 34.4 329,425 33.0
Selling, general and
administrative expenses 275,828 23.1 229,013 23.0
Income from operations 134,837 11.3 100,412 10.0
Interest income, net 530 0.0 5,963 0.6
Income before income taxes 135,367 11.3 106,375 10.6
Income taxes 54,170 4.5 41,913 4.2
Net income $81,197 6.8% $64,462 6.4%
Basic earnings per share $1.21 $0.84
Diluted earnings per share $1.20 $0.84
Weighted average basic shares 66,835 76,590
Weighted average diluted shares 67,556 77,130
STORE DATA:
Comparable store sales increase 9% 0%
Average square footage during
period 3,085,989 2,774,985
EXHIBIT D
AEROPOSTALE, INC.
RECONCILIATION OF FOURTH QUARTER 2007 NET INCOME AND
DILUTED EARNINGS PER SHARE
(in thousands, except per share data)
13 weeks ended
February 2, 2008
Per
diluted
Net income share
As reported $ 64,735 $ 0.95
Asset impairment charges 5,694 0.08
Gift card breakage income (4,847) (0.06)
Other income (2,573) (0.04)
Excluding above income items $63,009 $0.93
SOURCE Aeropostale, Inc.
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