This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Aeropostale Is Surging

NEW YORK (TheStreet) - Aeropostale (ARO - Get Report) shares were surging 8.6% to $3.52 in post-markets trading after the struggling teen retailer said CEO Thomas P. Johnson would step down from his position. The company's board of directors and Johnson, who has been its CEO since December 2010, "mutually agreed" he would step down, according to a press release.

The New York-based company said that its former chairman and chief executive, Julian R. Geiger, has rejoined the company as CEO, effective immediately. Geiger, 68, was the chairman and CEO of Aeropostale from 1998 through 2010. He was CEO from 1996-1998. In 2010, he became just chairman until 2012.

Geiger was the president and CEO of Crumbs Bake Shop (CRMB) from November 2011 to December 2013, according to Bloomberg. Crumbs announced last month that it would be closing its stores.

Read More: Aeropostale Struggling to Show it Can Still Be Cool Like Forever 21, H&M

Johnson was appointed as Aeropostale's co-CEO in September 2009 and then to sole CEO in December 2010. He has agreed to "remain available for the company to ensure a smooth transition," the release said.

Aeropostale also warned investors that net sales for its fiscal second quarter declined 13% to $396.2 million compared to last year's quarter. Analysts were expecting sales of $395 million. Aeropostale's comparable sales declined 13% compared to the 10.8% decline expected by analysts.

The company now expects its quarterly operating loss in the range of approximately $61 million to $64 million, or 80 cents to 83 cents a share.

The loss includes net charges totaling $29 million to $31 million, or 37 cents to 39 cents a share, that includes "asset impairment charges, a charge against net deferred tax assets, consulting fees for operational initiatives, consulting fees associated with our cost reduction plan, investment banking fees, and interest and fee expense related to the company's transaction with Sycamore Partners," it said.

Excluding the charges Aeropostale expects a second quarter operating loss between $36 to $38 million, or 42 cents to 45 cents a share.

Aeropostale's original guidance called for a net loss between 55 cents and 61 cents a share. Aeropostale will report full earnings on August 21.

Read More: Dollar General's Family Dollar Bid Fails to Impress

--Written by Laurie Kulikowski in New York.

Follow @LKulikowski

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
ARO $3.50 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs