Aeropostale Loss Widens, To Explore Strategic Options; Shares Plunge

(RTTNews) - Struggling teen-apparel retailer Aeropostale Inc. (ARO), Thursday said its fourth-quarter loss widened from a year ago, driven largely by lower revenues and weak margins. The company's shares plunged over 40 percent in after-hours trade after it announced plans to review strategic alternatives for the business.

New York-based Aeropostale's fourth-quarter loss widened to $21.7 million or $0.27 per share from $13.5 million or $0.17 per share last year.

Excluding items, adjusted loss for the quarter was $0.14 per share compared to a profit of $0.01 per share a year ago. On average, 11 analysts polled by Thomson Reuters estimated a loss of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

Aeropostale's net sales for the fourth quarter dropped 16.1 percent to $498.0 million from $593.8 million last year. Analysts had a consensus revenue estimate of $519.69 million for the quarter.

Same-store sales, including the e-commerce channel, for the quarter declined 6.7 percent. Gross margin, or percentage of sales left after deducting cost of sales, dropped to 20.3 percent from 22.7 percent last year.

Looking forward to the first quarter, the company expects loss of $0.35 to $0.42 per share. Analysts currently estimate loss of $0.40 per share for the quarter.

Meanwhile, Aeropostale said it has authorized management to explore a full range of strategic and financial alternatives, including a potential sale or restructuring of the company.

ARO closed Thursday's trading at $0.48, down $0.01 or 2.04%, on the NYSE. The stock further dropped $0.21 or 43.75% in the after hours trade.