Net sales at specialty retailer of casual apparel for young women and men Aeropostale dived 17 per cent year over year for the second fiscal quarter ended August 2, 2015.
For the second quarter of fiscal 2016, net sales at the retailer fell steeply to $326.9 million, down 17 per cent from $396.2 million in the fiscal ago period.
Comparable sales, including the e-commerce channel too declined 8 per cent; however better than the 13 per cent decrease in the corresponding 13-week period ended August 2, 2014.
The company reported a net loss of $43.7 million or $0.55 per diluted share in the reporting quarter which includes a $0.04 per diluted share, resulting from store closing costs.
The net loss also includes an after-tax charge of $2.4 million, or $0.03 per diluted share, due to consulting fees.
All of these were offset by an after-tax benefit of $6.4 million, or $0.08 per diluted share, due to reversals of previously established exit cost obligation liabilities resulting from subsequent lease terminations.
Excluding the aforementioned charges, the company reported an adjusted net loss of $44.8 million, or $0.56 per diluted share in the second quarter of fiscal 2016.
CEO Julian Geiger said, "The second quarter was an important transitional time for us in which we set the stage for the second half of the fiscal.”
“During the quarter, we attained very high levels of merchandise currency, delivered our new back to school merchandise, and refocused our marketing efforts around key items,” he added.
The company ended the second quarter of current fiscal with cash and cash equivalents of $86.5 million and $142.7 million in long-term debt.
The company closed 23 Aeropostale stores and also invested $6.0 million in planned capital expenditures during the quarter under review.
In a press release, the retailer said on August 18, 2015, it closed an amended credit facility, which expires in February 2019 at the earliest.
For the third quarter of fiscal 2016, Aeropostale expects operating losses in the range of $19.0-25.0 million, which translates to a net loss in the range of $0.30-0.38 per diluted share.
It also projects the effective tax rate for the third quarter of the current fiscal to be approximately 4.0 per cent.
“This outlook excludes the impact of any store impairments or accelerated store closing costs which may be identified and also excludes consulting fees,” it explained.
Geiger further added, “Our third quarter outlook reflects a continuation of the momentum, we have generated in the quarter-to-date period and indicates a significant reduction in operating loss versus last fiscal."
