Aeropostale's Profit Takes Off

Earnings beat expectations, though the teen retailer offers a tepid sales forecast for the current quarter.
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Aeropostale

(ARO)

reported an 18% jump in fourth-quarter profits and beat Wall Street's expectations, but the company issued a tepid sales forecast for its current quarter.

The teen-clothing retailer said it earned $41.8 million or 76 cents a share, for its holiday quarter, up from $35.3 million, or 62 cents a share, a year earlier. Analysts, on average, were expecting earnings of 74 cents a share, according to Thomson First Call.

For its current quarter, Aeropostale said it expects its same-store sales, or sales at stores open for at least a year, to be flat or negative. It forecast earnings of 14 cents a share to 16 cents a share. Wall Street was expecting earnings of 16 cents a share for the quarter.

The company, which operates its namesake stores as well as the Jimmy'Z chain, posted 33% sales growth for the holiday quarter to $435.2 million. Same-store sales rose 10.3%.

During the period, Aeropostale repurchased around $9 million worth of its stock, or 346,000 shares. That left it with $41.9 million of repurchase availability under its $150 million stock buy back program.

The company opened six Aeropostale stores and one Jimmy'Z store in the fourth quarter, and it closed four Aeropostales. That brought its total store count at the end of the fiscal year to 657 Aeropostale stores and 14 Jimmy'Z stores.

The company said it plans to open 70 to 75 Aeropostale stores and up to five Jimmy'Z stores during fiscal 2006.

Its shares recently were up 60 cents, or 2.1%, to $29.07 in after-hours trading.