Aeropostale Revenues Jump 17%; Earnings Beat By a Penny

Teen retailer Aeropostale reported a 37% rise in quarterly profit on Thursday as sales rose nearly 17% with the help of an additional week in the quarter.

Shares of Aeropostale closed on the New York Stock Exchange at $38.69 and rose 8 cents in extended trade.

The mall-based retailer of casual, colorful basics said net income for the 14-week fourth quarter ended Feb. 3 was $57.3 million, or $1.08 per share, compared with $41.8 million, or 76 cents per share, for the 13-week quarter ended Jan. 28, 2006.

The results included concessions of $7.4 million, or 8 cents per diluted share, primarily from South Bay Apparel for prior purchases of merchandise. Excluding those, Aeropostale's profit would have been $1 per share.

Analysts, on average, had been expecting Aeropostale to post a profit of per share of 99 cents, excluding items, on sales of $506.1 million, according to Reuters Estimates.

Aeropostale had anticipated that earnings, excluding the concessions, would range between 98 cents and 99 cents. Inclusive, it expected earnings of between $1.06 and $1.07.

Total sales grew to $506.8 million from $435.2 million, slightly above a Wall Street consensus estimate of $506.1 million, according to Reuters Estimates. Analyst Gabrielle Kivitz of Deutsche Bank noted in a report that an improvement in gross margin reflected fewer promotions during the quarter.

Aeropostale, which competes with other mall-based rivals such as American Eagle Outfitters and Pacific Sunwear of California, said it would open 85 new Aeropostale stores under a new store format in fiscal 2007, including 10 in Canada.

For the first quarter of 2007, Aeropostale said it expects earnings to range between 19 cents and 21 cents. That compares to an average analysts' estimate of 20 cents, according to Reuters Estimates. In the year ago period, the company earned 15 cents a share.

For fiscal 2007, the company expects earnings per share diluted to grow approximately 20 percent.