Teen specialty retailer Aéropostale Inc. said Wednesday that third-quarter earnings jumped 10.6 percent, driven by improved margins from more full-priced merchandise and inventory controls.
This story first appeared in the November 29, 2007 issue of WWD. Subscribe Today.
For the three months ended Nov. 3, earnings reached $36 million, or 48 cents a share, from $32.6 million, or 41 cents, in the same year-ago period. Sales for the quarter rose 7 percent to $412.6 million from $385.5 million, and total same-store sales increased 1.9 percent.
For the nine-month period, earnings soared 30.6 percent to $64.5 million, or 84 cents a share, from $49.4 million, or 61 cents, last year. Sales gained 10.3 percent to $999.6 million from $906.4 million.
“We are very pleased with our results for the quarter, which exceeded expectations,” Julian R. Geiger, chairman and chief executive officer, said in a statement. “During the quarter we were able to drive consistent comparable-store sales increases, while continuing to improve our gross margins over last year. We also ended the quarter with well-controlled inventories.”
During the quarter, the company announced the buyback of 6.3 million shares for about $125.1 million, in addition to its accelerated share repurchase program.
Geiger said that on Black Friday and Saturday, Aéropostale achieved midsingle-digit same-store sales increases. The company expects to deliver higher comps in the midsingle digits for November.
“The reaction to our holiday merchandise assortment has been positive and we remain focused on executing our strategies for the peak holiday selling season,” Geiger said in the statement.
Aéropostale forecast fourth-quarter earnings in the range of 82 cents to 84 cents a diluted share and full-year earnings of $1.60 to $1.62 a diluted share.
“Moving forward into next year, we are focused on continuing to [fine-tune our] merchandising approach by further balancing core fashion, identifying…key classifications and developing and introducing new product categories,” Mindy Meads, president and chief merchandising officer, said in a conference call with Wall Street analysts.
The company plans to include a larger share of dresses heading into the spring, and expand in women’s accessories with a deeper selection of bags and shoes, Meads said during the call.