Ahead Of Aéropostale's Q4 Results

(RTTNews) - Teen apparel retailer Aéropostale Inc. (ARO) is slated to release its fourth-quarter results after the bell on Thursday, March 17, with analysts polled Thomson Reuters estimating a loss of $0.14 per share on revenue of $521.19 million. Analysts' estimate typically exclude certain special items.

The company continues to project fourth-quarter operating loss in the range of $0 million - $10 million, which translates to a net loss of $0.04 - $0.17 per share. This guidance assumes a low-to-mid single digit decline in comparable sales.

Gross margins are expected to be down, while SG&A dollars are expected to decline by a low-double digit percentage. Currently, the company expects depreciation and amortization of about $9 million, a nominal income tax rate of about 0%, and shares outstanding of 80.4 million.

Recently, the company has instituted an aggressive new cost reduction program targeting both direct and indirect spending across the organization. It expects this new program to generate about $35 million - $40 million in annualized pre-tax savings, which is expected to be achieved in fiscal 2016. The company estimates that it will record pre-tax cash expenses of about $1.5 million during fiscal 2015 related to this program.

As part of its new cost reduction program, Aéropostale has also planned corporate headcount reduction by about 100 positions, or 13%, by the end of fiscal 2015.

For fiscal 2016, the company expects to invest about $14.0 million primarily related to store remodels and certain infrastructure investments. This compares to capital expenditures of about $16.0 million planned for fiscal 2015.

Q3 Overview

For the third quarter of fiscal 2015, net sales decreased 20% to $363.3 million, from $452.9 million in the year ago period, reflecting a 10% decline in comparable sales, including e-commerce channel and a weighted average square footage decrease of 20% resulting from store closures.

Net loss for the quarter was $26.4 million or $0.33 per share compared to a net loss of $52.3 million or $0.66 per share last year.

Excluding charges, adjusted net loss totaled $24.6 million or $0.31 per share compared to a loss of $35.2 million or $0.45 per share in the third quarter of fiscal 2014.