By  on August 18, 2006

Among the specialty retailers reporting quarterly figures Thursday, earnings were affected by option expensing, settlement gains and weaker sales.

Aéropostale Inc., the mall-based teen specialty retailer, reported a slight rise in earnings for the second quarter because of a resolved dispute with a vendor regarding the enforcement of the company's intellectual property.

For the three months ended July 29, net income increased to $8.4 million, or 16 cents a diluted share, from $7.4 million, or 13 cents, in the year-ago period. Excluding the $2.1 million received from the settlement, the company reported an income of $7.2 million, or 13 cents a share. The results included net losses at Jimmy'Z of 3 cents a diluted share, as well as a 1-cent per diluted share charge related to the expensing of stock options.

Sales climbed 18 percent, to $274.6 million from $232.8 million last year, and same-store sales bumped 1 percent compared with a decrease of 2.2 percent in 2005.

"While we were able to achieve results in line with our plan for May and June, our sales and margins for the quarter were negatively affected by a significant slowdown in our business in the latter half of July," said Julian R. Geiger, chairman and chief executive officer of the company, in a release. "The trends in our business improved in August, particularly in the early back-to-school region, but we are unable to extrapolate this performance to the other regions, which have not yet packed in their back-to-school selling season."

The company remains cautious looking into the third quarter, expecting earnings in the range of 55 to 57 cents a diluted share, including a 1-cent per share charge related to the expensing of stock options.

New York & Co. posted a decline in second-quarter earnings, as sales for stores opened at least a year fell below analysts' expectations.

For the three months ended July 29, net income dropped to $6.5 million, or 11 cents a diluted share, from $12.3 million, or 21 cents, in the same period last year. Sales increased 4 percent, to $264.9 million from $254.6 million. Same-store sales decreased 4 percent, compared with a 0.4 percent increase last year.

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