EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
 
Exhibit 99.1
 
AÉROPOSTALE REPORTS RESULTS FOR SECOND QUARTER

New York, New York, August 18, 2011 -- Aéropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual apparel for young women and men, today reported results for the second quarter of fiscal 2011, and provided guidance for the third quarter of fiscal 2011.

Second Quarter Performance
Diluted net earnings per share for the second quarter were $0.04 per diluted share, which included a non-recurring pre-tax benefit to the Company’s gross profit of $8.7 million, or $0.06 per diluted share, resulting from the resolution of a dispute with one of the Company’s merchandise vendors, surrounding prior period allowances. The Company reported net earnings of $0.46 per diluted share in the second quarter last year.

For the second quarter of fiscal 2011 net sales decreased 5% to $468.2 million, from $494.7 million in the year ago period. Same store sales for the second quarter decreased 14%, compared to a same store sales increase of 4% last year. Year to date net sales decreased 2% to $937.4 million, from $958.3 million in the year ago period. Year to date, same store sales decreased 10%, compared to a same store sales increase of 5% in the year ago period.

E-commerce
Total net sales from the Company’s e-commerce business for the second quarter of fiscal 2011 increased 20% to $25.1 million, from $20.9 million in the year ago period.

Cash Positioning and Share Repurchase Program
The Company ended the quarter with cash and cash equivalents of $73.1 million, and no debt. The Company currently has $145.2 million of availability remaining under its share repurchase program.

Store Growth and Capital Spending
The company opened 7 Aéropostale and 10 P.S. from Aéropostale stores, and closed 2 Aéropostale stores during the quarter. For the second quarter the company incurred $21.1 million in capital expenditures.

Third Quarter Guidance
For the third quarter of fiscal 2011, the Company expects net earnings in the range of $0.09 to $0.15 per diluted share, compared to net earnings of $0.63 per diluted share in the same period last year.
 
Thomas P. Johnson, Chief Executive Officer, commented, “Our outlook for the third quarter reflects challenging sales and margin trends, as well as an uncertain macroeconomic environment.  While we are very disappointed with our current performance, we are working diligently to integrate the right balance of fashion into our assortment.  Additionally, we will find new ways to connect with our customer, and amplify our fashion message. I am very confident that the strategies we have in place and the tenacity of our organization will position us for future growth and success.”
 
Conference Call Information
The Company will be holding a conference call today at 4:15 P.M EDT to review its second 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 Aéropostale, Inc.
Aéropostale, Inc. is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young women and men through its Aéropostale® stores and 7 to 12 year-old kids through its P.S. from Aéropostale® stores. The Company provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values. Aéropostale® maintains control over its proprietary brands by designing, sourcing, marketing and selling all of its own merchandise. Aéropostale® products can only be purchased in its Aéropostale stores and online at www.aeropostale.com. P.S. from Aéropostale® products can be purchased in P.S. from Aéropostale® stores and online at www.ps4u.com. The Company currently operates 916 Aéropostale stores in 49 states and Puerto Rico, 63 Aéropostale stores in Canada and 64 P.S. from Aéropostale stores in 17 states.

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.
 

 
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EXHIBIT A
 
 
AÉROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(in thousands)

 
   
July 30, 2011
    
January 29, 2011
    
July 31, 2010
  
                   
ASSETS
                  
Current Assets:
                  
  Cash and cash equivalents
   $ 73,077     $ 265,553     $ 297,466  
  Merchandise inventory
     248,491       156,596       215,457  
  Other current assets
     79,241       47,416       72,185  
     Total current assets
     400,809       469,565       585,108  
                         
Fixtures, equipment and improvements, net
     316,000       299,242       273,206  
                         
Other assets
     5,186       4,390       8,102  
                         
TOTAL ASSETS
   $ 721,995     $ 773,197     $ 866,416  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
Current Liabilities:
                        
  Accounts payable
   $ 159,805     $ 103,014     $ 140,950  
  Accrued expenses
     75,249       113,088       114,158  
     Total current liabilities
     235,054       216,102       255,108  
                         
Other non-current liabilities
     129,854       124,458       113,817  
                         
Stockholders’ equity
     357,087       432,637       497,491  
                         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 721,995     $ 773,197     $ 866,416  

 

 
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EXHIBIT B

AÉROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
 
(in thousands, except per share and store data)


   
13 weeks ended
  
   
July 30, 2011
    
July 31, 2010
  
         
% of sales
          
% of sales
  
                         
Net sales
   $ 468,191       100.0 %   $ 494,706       100.0 %
                                 
Cost of sales (including certain buying, occupancy and warehousing expenses)
     354,156       75.6       310,076       62.7  
                                 
Gross profit
     114,035       24.4       184,630       37.3  
                                 
Selling, general and administrative expenses
     108,649       23.2       113,162       22.9  
                                 
Income from operations                                                                     
     5,386       1.2       71,468       14.4  
                                 
Interest expense, net
     48       0.0       13       0.0  
                                 
Income before income taxes                                                                     
     5,338       1.2       71,455       14.4  
                                 
Income taxes                                                                     
     2,397       0.5       27,855       5.6  
                                 
Net income                                                                     
   $ 2,941       0.7 %   $ 43,600       8.8 %
                                 
Basic earnings per share                                                                     
   $ 0.04             $ 0.47          
                                 
Diluted earnings per share                                                                     
   $ 0.04             $ 0.46          
                                 
Weighted average basic shares                                                                     
     80,729               93,473          
                                 
Weighted average diluted shares
     81,259               94,589          
                                 
STORE DATA:
                                
                                 
Comparable store sales (decrease) increase                                                                     
     (14 )%             4 %        
                                 
Stores open at end of period                                                                     
     1,042               983          
                                 
Total square footage at end of period                                                                     
     3,836,721               3,543,742          
                                 
Average square footage during period
     3,820,432               3,514,103          




 
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EXHIBIT C

AÉROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
 
(in thousands, except per share and store data)


   
26 weeks ended
  
   
July 30, 2011
    
July 31, 2010
  
         
% of sales
          
% of sales
  
                         
Net sales
   $ 937,374       100.0 %   $ 958,347       100.0 %
                                 
Cost of sales (including certain buying, occupancy and warehousing expenses)
     686,681       73.3       590,898       61.7  
                                 
Gross profit
     250,693       26.7       367,449       38.3  
                                 
Selling, general and administrative expenses
     217,731       23.2       220,830       23.0  
                                 
Income from operations                                                                     
     32,962       3.5       146,619       15.3  
                                 
Interest expense, net
     115       0.0       40       0.0  
                                 
Income before income taxes                                                                     
     32,847       3.5       146,579       15.3  
                                 
Income taxes                                                                     
     13,539       1.4       57,595       6.0  
                                 
Net income                                                                     
   $ 19,308       2.1 %   $ 88,984       9.3 %
                                 
Basic earnings per share                                                                     
   $ 0.24             $ 0.95          
                                 
Diluted earnings per share                                                                     
   $ 0.23             $ 0.94          
                                 
Weighted average basic shares                                                                     
     81,667               93,692          
                                 
Weighted average diluted shares
     82,352               94,766          
                                 
STORE DATA:
                                
                                 
Comparable store sales (decrease) increase                                                                     
     (10 )%             5 %        
                                 
Average square footage during period
     3,778,964               3,482,833          

 

 
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