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Aeropostale Inc. Earnings: Margins Thinner, Profit Drops

Aeropostale Inc. reported its results for the fourth quarter. Aeropostale is a mall-based retailer that sells casual apparel and accessories for young adults.

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Aeropostale Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Aeropostale Inc. fell to $26.1 million (32 cents per share) vs. $83.8 million (95 cents per share) a year earlier. This is a decline of 68.9% from the year-earlier quarter.

Revenue: Fell 3.7% to $808.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Aeropostale Inc. reported adjusted net income of 44 cents per share. By that measure, the company beat the mean estimate of 38 cents per share. Analysts were expecting revenue of $805.6 million.

Quoting Management: Thomas P. Johnson, Chief Executive Officer, commented, “I am very proud of the speed, diligence and tenacity of our entire team in addressing our business challenges.  We worked swiftly and strategically throughout the year to infuse newness into our merchandise assortment and evolve the projection of our fashion message.  While our overall financial performance for the year was disappointing, we believe 2011 was a pivotal inflection point for our organization.”

Key Stats:
Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 11.3 percentage points from the year-earlier quarter to 24.3%. Over that time, margins have contracted on average 9.5 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 3 cents in the third quarter and by one cent in the second quarter.

Revenue has fallen for the last three quarters in a row. In the third quarter, revenue declined 1% to $596.5 million while the figure fell 5.4% in the second quarter from the year earlier.

Net income has dropped 59.6% year-over-year on average across the last five quarters. Performance was hurt by a 93.3% decline in the second quarter from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 14 cents per share to 12 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is 85 cents per share, down from 86 cents ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com