Two hot teen retailers — Aéropostale Inc. and The Buckle Inc. — stayed that way in the fourth quarter, generating double-digit gains in profits and higher net and comparable-store sales.
However, Pacific Sunwear of California Inc. saw losses mount and projected losses and lower comps in the first quarter.
Helped by tight controls on inventory and continued emphasis on trend-right but value-intensive merchandise, Aéropostale said net income for the three months ended Jan. 30 grew 41.5 percent to $96.6 million, or 99 cents a diluted share, from $68.2 million, or 67 cents, in the year-ago quarter. Quarterly revenue rose 16.1 percent, to $801.2 million from $690 million, as comps picked up 9 percent. Analysts expected earnings per share of 95 cents on sales of $797.7 million, according to Yahoo Finance.
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Gross margin improved to 38.8 percent of sales from 35.3 percent.
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“While we are very pleased with the performance this year, we know we still have lots of room to improve,” said Mindy Meads on her first conference call as co-chief executive officer.
For the year, the retailer posted a 53.6 percent increase in net income to $229.5 million, or $2.27 a diluted share, from $149.4 million, or $1.47 a share, in 2008. Annual revenues expanded 18.3 percent, to $2.23 billion from $1.89 billion, and increased 10 percent on a comp basis.
During the year, the retailer said it would open about 25 Aéropostale stores and between 25 and 30 P.S. from Aéropostale stores, in addition to remodeling roughly 40 stores.
First-quarter EPS is expected to be between 39 cents to 40 cents, with full-year EPS of about $2.61. Wall Street is looking for first-quarter EPS of 37 cents, and annual EPS of $2.26.
Buckle said Thursday that strong denim sales and improvement in its men’s business contributed to a 22.7 percent jump in fourth-quarter profits, surpassing expectations.
The Kearney, Neb.-based teen retailer delivered net income of $42.1 million, or 90 cents a diluted share, for the period ended Jan. 30, compared with income of $34.3 million, or 74 cents, in the year-ago quarter. Quarterly revenues expanded 9.2 percent, to $274.4 million from $251.4 million, and grew 3.8 percent on a same-store basis.
Analysts surveyed by Yahoo expected EPS of 84 cents on sales of $270.8 million.
Gross margin improved to 47.2 percent of sales from the year-ago level of 46.1 percent.
The men’s division, which had struggled against robust year-ago figures, was up slightly for the quarter, the company said, and women’s merchandise sales increased about 16 percent.
Denim accounted for about 46 percent of sales, while tops accounted for roughly 36.5 percent. Buckle said average denim price points increased in the men’s segment to $88.50 from $81.85, and, on the women’s side, to $93.10 from $86.50.
“We feel good about our men’s business and look forward to this year on the men’s side,” said president and ceo Dennis Nelson on a conference call.
For the year, Buckle’s net income grew 21.9 percent to $127.3 million, or $2.73 a diluted share, from $104.4 million, or $2.24 a share, in 2008. Sales increased 13.4 percent, to $898.3 million from $792 million, and rose 7.8 percent on a comp basis.
At Pacific Sunwear, the net loss in the fourth quarter escalated to $36.5 million, or 56 cents a diluted share, from $27 million, or 42 cents, in the year-ago quarter. Excluding a $19 million noncash charge for a valuation allowance against certain deferred tax assets, the loss narrowed to $17 million, or 26 cents a diluted share. Sales fell 16.8 percent, to $292.6 million from $351.7 million, and dropped 19 percent on a same-store basis.
Gary Schoenfeld, president and ceo of the Anaheim, Calif.-based retailer, said “We’ve still got a tough period ahead of us in our junior’s business,” but noted young men’s categories could lead the turnaround of the company’s overall results.
For the first quarter of fiscal year 2010, the company expects a loss per share of 50 cents to 60 cents, which still reflects the continued impact of the valuation allowance charge. Same-store sales are expected to decline 13 percent to 18 percent.
For the year, the loss widened to $70.3 million, or $1.07 a diluted share, from $63.8 million, or 96 cents, in 2008. Sales dropped 18.2 percent to $1.03 billion from $1.25 billion as same-store sales fell 20 percent.