Aeropostale's

(ARO)

overall sales and earnings rose in its fourth quarter, despite a sharp fall in the apparel chain's same-store sales growth.

The New York-based retailer earned $17.7 million, or 46 cents a share, on $206.4 million in sales in its quarter ended Feb. 1, Aeropostale said on Thursday. In the year-ago quarter, the company earned $13.9 million, or 38 cents a share, on sales of $158 million.

Analysts surveyed by Thomson Financial/First Call were expecting Aeropostale to post earnings of 45 cents a share. The company increased its earnings guidance last month to a range of 44 cents to 46 cents a share from its previous projection of 38 cents to 40 cents per share.

The company reiterated its guidance for fiscal 2003, saying it expects to earn between $1.06 to $1.10 a share on revenue between $670 million to $674million. For the first two quarters combined, Aeropostale expects to post a bottom line of between break-even to a loss of 2 cents a share.

Analysts have projected that the company will break even in the first quarter and earn $1.10 a share for the year.

For all of fiscal 2002, the teen clothing chain earned $31.3 million, or 82 cents a share, on $550.9 million in sales. In fiscal 2001, Aeropostaleposted profits of $26.5 million, or 71 cents a share, on $404.4 million in revenue. The company's 2001 earnings benefited from an accounting changethat added 5 cents a share to its bottom line.

Aeropostale's fourth-quarter earnings surge came despite a same-store sales increase of just 0.3% in the quarter. In the year-ago period, the apparel chain's same-store sales, which compare results at outlets open more than one year, rose 23.1%.

Earnings also rose despite a steep drop in the company's gross profit margins. Aeropostale's gross profit margin, which measures the differencebetween what a company charges consumers for its products and what it pays suppliers for them, fell 410 basis points from the year before to 30.7% ofsales.

The company was able to make up for the gross margin decline in large part through controlling its sales, general and administrative costs. Suchexpenses declined 340 basis points from the fourth quarter a year ago to 16.5% of revenue.

Aeropostale's shares closed regular trading on the

New York Stock Exchange

up 93 cents to $12.28. A spinoff of

Federated Department Stores'

(FD)

Macy's division, Aeropostale raised $225 million in an initial public offering last May.