NEW YORK--(BUSINESS WIRE)--Aug. 17, 2006--Aeropostale, Inc. (NYSE:
ARO), a mall-based specialty retailer of active and casual apparel for
the teen market, today reported results for the second quarter ended
July 29, 2006.
SECOND QUARTER PERFORMANCE:
Net income for the second quarter of fiscal 2006 was $8.4 million,
or $0.16 per diluted share (which includes $2.1 million of other
income in connection with the resolution of a dispute with a vendor
regarding the enforcement of the Company's intellectual property
rights). Net income, excluding other income, was $7.2 million, or
$0.13 per diluted share for the second quarter of fiscal 2006. The
Company believes that the disclosure of diluted earnings per share
excluding such other income, which is a non-GAAP financial measure,
provides investors useful information to help them better understand
the Company's expected results without the impact of the other income
described above. The Company had net income of $7.4 million or $0.13
per diluted share in the second quarter of fiscal 2005.
The above-mentioned results included net losses from the Company's
Jimmy'Z subsidiary of ($0.03) per diluted share for the second quarter
of 2006 and ($0.02) for the second quarter of fiscal 2005. In
addition, the consolidated results for the second quarter of 2006
included a $0.01 per diluted share charge related to the expensing of
stock options.
For the second quarter of fiscal 2006, total net sales increased
18.0% to $274.6 million, compared to $232.8 million in the year-ago
period. Comparable store sales for the second quarter increased 1.0%,
versus a comparable store sales decrease of 2.2% in the year-ago
period. Fiscal year to date, total net sales increased 17.2% to $520.9
million, compared to $444.4 million in the year-ago period. Also
fiscal year to date, comparable store sales decreased 0.9%, versus a
comparable store sales increase of 0.9% in the year-ago period.
Julian R. Geiger, Chairman and Chief Executive Officer said,
"During the second quarter, we believe that we executed our
merchandising and planning initiatives consistently and well. 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. The
trends in our business improved in August, particularly in the early
back to school regions, but we are unable to extrapolate this
performance to the other regions, which have not yet peaked in their
back to school selling season. As a result of this, we believe that it
is prudent to adopt a somewhat cautious outlook on our business for
the remainder of the third quarter."
THIRD QUARTER GUIDANCE:
The Company announced its earnings guidance for the third quarter
of fiscal 2006. The Company believes it will achieve earnings in the
range of $0.55 - $0.57 per diluted share, including the $0.01 per
diluted share charge related to the expensing of stock options.
CONFERENCE CALL INFORMATION:
The Company will be holding a conference call today at 4:15 P.M.
to review its second quarter results. The broadcast will be available
through the 'Investor Relations' link at www.aeropostale.com and at
www.fulldisclosure.com. To listen to the broadcast your computer must
have Windows Media Player installed. If you do not have Windows Media
Player go to the latter site prior to the call, where you can download
the software for free.
About Aeropostale, Inc.
Aeropostale, Inc. is a mall-based, specialty retailer of casual
apparel and accessories, principally targeting 14 to 17 year-old young
women and men. The Company provides customers with a focused selection
of high-quality, active-oriented, fashion and fashion basic
merchandise at compelling values. Aeropostale maintains control over
its proprietary brands by designing, sourcing, marketing and selling
all of its own merchandise. Aeropostale products are currently
purchased only in its stores, on-line through its e-commerce website
(www.aeropostale.com) or at organized sales events at college
campuses.
The Company currently operates 712 Aeropostale stores in 47 states
and 14 Jimmy'Z stores in 11 states.
SPECIAL NOTE: THIS PRESS RELEASE AND ORAL STATEMENTS MADE FROM
TIME TO TIME BY REPRESENTATIVES OF THE COMPANY CONTAIN CERTAIN
"FORWARD-LOOKING STATEMENTS" CONCERNING EXPECTATIONS FOR SALES, STORE
OPENINGS, GROSS MARGINS, EXPENSES, STRATEGIC DIRECTION AND EARNINGS.
ACTUAL RESULTS MIGHT DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO MATERIALLY DIFFER INCLUDE, AMONG OTHERS, CHANGES IN THE
COMPETITIVE MARKETPLACE, INCLUDING THE INTRODUCTION OF NEW PRODUCTS OR
PRICING CHANGES BY OUR COMPETITORS, CHANGES IN THE ECONOMY AND OTHER
EVENTS LEADING TO A REDUCTION IN DISCRETIONARY CONSUMER SPENDING;
SEASONALITY; RISKS ASSOCIATED WITH CHANGES IN SOCIAL, POLITICAL,
ECONOMIC AND OTHER CONDITIONS AND THE POSSIBLE ADVERSE IMPACT OF
CHANGES IN IMPORT RESTRICTIONS; RISKS ASSOCIATED WITH UNCERTAINTY
RELATING TO THE COMPANY'S ABILITY TO IMPLEMENT ITS GROWTH STRATEGIES,
AS WELL AS THE OTHER RISK FACTORS SET FORTH IN THE COMPANY'S FORM 10-K
AND CURRENT REPORTS ON FORM 8-K, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR
REVISE ANY FORWARD-LOOKING STATEMENTS TO REFLECT SUBSEQUENT EVENTS OR
CIRCUMSTANCES.
EXHIBIT A
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
July 29, Jan. 28, July 30,
2006 2006 2005
--------- --------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 117,307 $ 205,235 $ 127,940
Short-term investments 34,117 20,037 14,031
Merchandise inventory 154,720 91,908 162,726
Other current assets 30,015 22,159 27,328
--------- --------- ---------
Total current assets 336,159 339,339 332,025
Fixtures, equipment and
improvements, net 178,972 160,229 144,509
Other assets 4,435 4,383 4,459
--------- --------- ---------
TOTAL ASSETS $ 519,566 $ 503,951 $ 480,993
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 99,391 $ 57,165 $ 108,178
Accrued expenses 54,640 69,188 39,649
--------- --------- ---------
Total current liabilities 154,031 126,353 147,827
Other non-current liabilities 100,639 92,808 83,745
Stockholders' equity 264,896 284,790 249,421
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 519,566 $ 503,951 $ 480,993
========= ========= =========
EXHIBIT B
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
13 weeks ended
--------------
July 29, 2006 July 30, 2005
--------------- ---------------
% of % of
sales sales
----- -----
Net sales $274,624 100.0% $232,770 100.0%
Cost of sales (including certain
buying, occupancy and warehousing
expenses) 202,048 73.6 170,743 73.4
--------- ----- --------- -----
Gross profit 72,576 26.4 62,027 26.6
Selling, general and administrative
expenses 62,222 22.7 50,607 21.7
Other income 2,085 0.8 -- --
--------- ----- --------- -----
Income from operations 12,439 4.5 11,420 4.9
Interest income, net 1,372 0.5 796 0.3
--------- ----- --------- -----
Income before income taxes 13,811 5.0 12,216 5.2
Income taxes 5,388 1.9 4,767 2.0
--------- ----- --------- -----
Net income $ 8,423 3.1% $ 7,449 3.2%
========= ===== ========= =====
Basic earnings per share $ 0.16 $ 0.13
========= =========
Diluted earnings per share $ 0.16 $ 0.13
========= =========
Weighted average basic shares 53,627 55,408
Weighted average diluted shares 54,072 56,367
STORE DATA:
Comparable store sales increase
(decrease) 1.0% (2.2)%
Stores open at end of period 726 634
Total gross square footage at end of
period 2,578,224 2,241,787
EXHIBIT C
AEROPOSTALE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
SELECTED STORE DATA
(in thousands, except per share and store data)
26 weeks ended
-------------------------------
July 29, 2006 July 30, 2005
--------------- ---------------
% of % of
sales sales
----- -----
Net sales $520,916 100.0% $444,444 100.0%
Cost of sales (including certain
buying, occupancy and warehousing
expenses) 377,862 72.5 322,646 72.6
--------- ----- --------- -----
Gross profit 143,054 27.4 121,798 27.4
Selling, general and administrative
expenses 120,487 23.1 97,044 21.8
Other income 2,085 0.4 -- --
--------- ----- --------- -----
Income from operations 24,652 4.7 24,754 5.6
Interest income, net 2,868 0.6 1,581 0.4
--------- ----- --------- -----
Income before income taxes 27,520 5.3 26,335 5.9
Income taxes 10,734 2.1 10,272 2.3
--------- ----- --------- -----
Net income $ 16,786 3.2% $ 16,063 3.6%
========= ===== ========= =====
Basic earnings per share $ 0.31 $ 0.29
========= =========
Diluted earnings per share $ 0.31 $ 0.28
========= =========
Weighted average basic shares 54,017 55,408
Weighted average diluted shares 54,526 56,470
STORE DATA:
Comparable store sales (decrease)
increase (0.9)% 0.9%
CONTACT: Aeropostale, Inc.
Kenneth Ohashi/VP, Investor and Media Relations
646-452-1876
kohashi@aeropostale.com
SOURCE: Aeropostale, Inc.
