Apparel retailer Aeropostale Inc. said Wednesday its profit rose 47 percent in the third quarter as sales climbed by a double-digit percentage. But shares tumbled after-hours as the company's outlook disappointed Wall Street.
The clothing chain reported a rise in total sales as well as sales at stores open at least a year, a key retail measure. But the company's fourth-quarter profit outlook of $1.20 to $1.24 per share left open the possibility it could disappoint analysts, who expect $1.22 per share.
The stock fell $2.63, or 8 percent, to $30.10 in after-hours trading.
Aeropostale, based in New York, earned $62.6 million, or 92 cents per share, in the quarter that ended Nov. 28. That is up from $42.6 million, or 63 cents per share, a year earlier.
Revenue rose 18 percent to $567.8 million from $482 million in the quarter
The results beat average estimates of analysts polled by Thomson Reuters, who expected 91 cents per share and sales of $566.5 million.
Sales at stores open at least a year rose 10 percent during the quarter. Sales at stores open at least a year are a key measure of retailer performance because they assess growth at existing stores rather than newly opened ones.
In the four weeks that ended Nov. 28, Aeropostale said sales at stores open at least a year rose 7 percent. Total sales in the four weeks rose 14 percent to $228 million from $200.9 million.
"We are very pleased with our strong start to the holiday selling season," said Chairman and CEO Julian R. Geiger, in a statement. "Our same-store sales for the Friday and Saturday following Thanksgiving Day increased 10 percent and our gross margins increased over last year."
The company plans to invest about $70 million in capital for fiscal 2010 to open approximately 25 Aeropostale stores, about 25-30 P.S. from Aeropostale stores, and 40 store remodels, in addition to certain information technology investments.