Aeropostale Q4 Earnings Conference Highlights; Shares Down 16%

reported its fourth quarter and fiscal 2013 results on Thursday, March 13, 2014. Shares of the mall-based specialty retailer are down $1.16, or 16 percent per share to $6.14. The following are highlights taken from the Q4 Earnings conference call: • For the fourth quarter of fiscal 2013, net sales decreased 16 percent to $670.0 million, from $797.7 million in the year ago period. • Fourth quarter comparable sales, including the e-commerce channel, decreased 15 percent, compared to a decrease of eight percent for the corresponding period of the prior year. • The Company reported a net loss for the fourth quarter of fiscal 2013 of $70.3 million, • The Company opened 5 Aeropostale and 3 P.S. from Aeropostale stores, and closed 32 Aeropostale stores during the quarter. • Net sales for fiscal 2013 decreased 12 percent to $2.091 billion, from $2.386 billion in the year ago period. • The Company ended the year with cash and cash equivalents of $106.5 million and no debt under its revolving credit facility. • CEO Thomas P. Johnson commented, "The results we generated in 2013 are not acceptable nor are they a reflection of the progress we believe we have made in transforming our brand. Having evaluated what we set out to do in 2013 and what we learned, we believe our strategy surrounding product, brand projection, process and growth is even more crucial to winning in today's challenging retail landscape." • The Company also separately announced today that it has signed a commitment letter with Sycamore Partners and its affiliates for a strategic partnership and $150 million in senior secured credit facilities. • For the first quarter of fiscal 2014, the Company expects operating losses in the range of $64 to $68 million. • The effective tax rate for the first quarter of fiscal 2014 is projected to be approximately 13.0 percent versus a tax rate of 41.2 percent last year. • The company now plans to open approximately seven Aeropostale stores and remodel, either partial or full, approximately ten Aeropostale stores, and expects to open one new P.S. store. • Currently, the company plans to close approximately 50 Aeropostale stores and two P.S. stores. • The Company expects to invest approximately $22 million in fiscal 2014 primarily related to store openings, store remodels and certain infrastructure investments. • Mr. Johnson continued, "We are moving aggressively and taking swift actions across all areas of our business that we expect will improve our operational and financial performance over time. The commitment letter for a strategic partnership and financing that we announced today more strongly positions the Company and provides us with the flexibility to continue executing on our strategies designed to reposition the Aeropostale brand." • Net revenues from the Company's e-commerce business for fiscal 2013, including net revenues from the GoJane.com business, which was acquired on November 13, 2012, was essentially flat at $217.6 million, from $217.0 million in the year ago period. • Net loss for fiscal 2013 was $141.8 million, or $1.81 per diluted share. • Net income for fiscal 2012 was $34.9 million, or $0.43 per diluted share. • Inventory at the end of the quarter was $172.3 million, up 10.8 percent in total or up 12 percent on a retail per square foot basis • Mark Miller, Chief Financial Officer, “Working capital will also be tightly managed, as Emilia mentioned earlier, with our conservative inventory buy plans in 2014. These announcements and actions will provide the liquidity necessary to execute this turnaround during this difficult macro environment. Our second financial priority is the optimization of our real estate portfolio. On our last earnings call, we announced the expansion of our store closure plan to 175 stores.” • Miller continued, “We have already taken several actions to manage expenses from a payroll and benefits perspective in 2014.” • Thomas Johnson, CEO, “Clearly, our fourth quarter results are not a reflection of the progress we believe we've made in transforming our brand. We are looking closely at every aspect of our organization to improve our financial results. While our largest opportunity continues to be improving our core Aeropostale business, we are also looking diligently to support our future growth drivers: e-commerce, P.S. and international.”