For the thirteen weeks period ended November 1, 2014, net loss at clothing retailer Aeropostale more than doubled year on year as a result of huge amount of after tax charges.
The retailer reported a net loss for the third quarter of 2014 of $52.3 million, or $0.66 per diluted share, as against $25.62 million or $0.33 per diluted share down 11.6 per cent.
The after tax charges included store asset impairment charges, lease buyout costs, consulting fees, restructuring charges and severance costs.
However, it also included an after-tax benefit of $1.8 million, or $0.02 per diluted share, related to the reversal of stock-based compensation expense.
Excluding these charges, the apparel retailer reported an adjusted net loss of $35.2 million, or $0.45 per diluted share in the third quarter of 2014 as against $25.62 million, down 11.6 per cent.
For the third quarter of 2014, net sales declined 12 per cent to $452.9 million, from $514.6 million in the year ago period.
Comparable sales, including the e-commerce channel, for the third quarter also slipped 11 per cent compared to the corresponding 13-week period ended November 2, 2013.
Aeropostale ended the quarter with cash and cash equivalents of $109.2 million and long-term debt of $136.0 million.
It opened three Aeropostale stores and closed 16 Aeropostale and seven P.S. from Aeropostale stores and invested $5.9 million in planned capital expenditures during the period under review.
CEO at Aeropostale, Julian Geiger said, "During my first 100 days, I have developed and begun executing my vision for positioning and returning the company to profitability.”
“We have made small but measurable steps in the right direction, which led to third quarter results that were in line with our guidance,” he added.
For the fourth quarter of 2014, Aeropostale expects operating losses in the range of $28.0 to $34.0 million, which translates to a net loss in the range of $0.37 to $0.44 per diluted share.
The effective tax rate for the fourth quarter is projected to be approximately 4.0 per cent. It added that the earnings guidance does not include impact of any store impairments or store closure costs.
Geiger continued, "Through changes in organizational structure, discipline, brand positioning, and assortments, assortment planning and allocation; I believe that our organization is capable of winning once again.
“Together, we will solve our current problems and jointly author our future success. Our goal is clear, which is to return to profitability," he concluded by saying. (AR)
