Teen apparel discount retailer Aeropostale Inc. (ARO) said Thursday its profit for the fourth quarter increased 42% over last year, driven by strong customer reaction to its spring merchandise assortment, which resulted in higher sales and improved margins.
Quarterly earnings came in well ahead of the analysts' expectations, as did sales. Looking ahead, the company provided earnings outlook for the first quarter, which is expected to beat the Street consensus.
The New York-based company posted net income of $96.6 million or $0.99 per share in the fourth quarter, up from $68.2 million or $0.67 per share in the prior year quarter. On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Fourth quarter net sales increased 16% to $801.2 million from $690.0 million in the same quarter last year. Same store sales increased 9% for the fourth quarter, compared to a 6% growth last year. Twenty-five analysts had a consensus revenue estimate of $797.74 million for the fourth quarter.
Total net sales from e-commerce business grew 42% to $63.9 million over a year earlier.
As percentage sales, gross margin improved to 38.8% from 35.3% in the year-ago quarter.
Selling, general and administrative expenses for the quarter increased to $151.5 million from $130.1 million in the prior year quarter.
The company ended fiscal 2009 with cash and cash equivalents of $347.0 million, compared to $228.5 million last year, and had no debt outstanding.
For the month of February, the mall-based specialty retailer of casual and active apparel for young women and men reported same store sales rise of 7%, compared to a same store sales increase of 11% in the year-ago month.
The company's total net sales for the four-week period ended on February 27 increased 15% to $126.4 million from $109.9 million a year earlier.
For fiscal year 2009, Aeropostale reported net income of $229.5 million or $2.27 per share, compared to $149.4 million or $1.47 per share in the previous year.
Annual net sales increased 18% to $2.230 billion from $1.886 billion in the prior year. Same store sales increased 10%, compared to a same store sales increase of 8% last year.
Analysts expected the company to report earnings of $2.26 per share on revenue of $2.23 billion for the year 2009.
For the first quarter of fiscal year 2010, Aeropostale anticipates earnings in the range of $0.39 to $0.40 per share. The Street currently expects earnings of $0.37 per share for the first quarter.
For the full year 2010, the company expects net earnings per share growth of about 15%.
Aeropostale plans about $80.0 million in capital expenditures for fiscal 2010 to open about 25 Aeropostale stores, about 25-30 P.S. from Aeropostale stores, and about 40 store remodels, in addition to certain information technology investments. This compares to capital expenditures of $54.0 million in fiscal 2009.
Among others in the industry, San Francisco, California-based Gap Inc. (GPS) reported that its fourth-quarter profit surged 45% from last year, driven by strong international sales and improved sales at Old Navy stores.
Pittsburgh, Pennsylvania-based American Eagle Outfitters Inc. (AEO) reported a profit for the fourth quarter that climbed 81% from last year, helped by strong sales and margins amid fewer markdown sales during the Christmas shopping season.
Aeropostale closed Thursday's regular trading session at $27.05, up 63 cents or 2.38%, on a volume of 4.23 million shares. In after-hours, the share further gained $1.29 or 4.77%. The stock has been moving in a range of $15.82 - $29.90 in the past 52 weeks, with an average three-month volume of about 3.21 million shares .
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