Aeropostale Inc. (NYSE: ARO) reported fourth-quarter and full fiscal year 2014 results after markets closed Thursday afternoon. The teen clothing retailer posted quarterly adjusted diluted earnings per share (EPS) of $0.01 on revenues of $593.8 million. In the same period a year ago, Aeropostale reported a per share loss of $0.35 on revenues of $670 million. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for a net loss per share of $0.03 and $576.78 million in revenue.

For the full year, Aeropostale reported a loss of $1.42 on revenues of $1.84 billion, compared with a loss of $1.13 per share and revenues of $2.09 billion in the prior year. The consensus estimates called for a loss of $1.45 on revenues of $1.83 billion.

On a GAAP basis, the company posted a quarterly net loss of $0.17 per share and a full-year net loss of $2.62 per share. The adjusted quarterly loss does not include asset impairment and other charges, and the full-year adjusted loss does not include store closures and asset impairment charges, among other items.

Same-store sales, including e-commerce sales, fell 9% in the fourth quarter, compared with a 15% drop in the fourth quarter a year ago. For the full year, same-store sales fell 11%, compared with a 15% drop in 2013.

ALSO READ: How Urban Outfitters Reached $1 Billion in Quarterly Sales for the First Time

While revenues looked good, gross profit increased to 22.7% in the fourth quarter. Aeropostale closed 240 stores over the course of 2014 and that cut revenues by nearly 13%. The company has to figure out a way to sell stuff and make a reasonable profit on it. A gross profit of 22.7% will not do the trick.

Aeropostale also announced that it had signed a commitment letter with private equity firm Sycamore Partners for a strategic partnership and $150 million in senior secured debt facilities. Sycamore receives convertible preferred stock that can be converted to a total of 5% of the company’s common stock at an exercise price of $7.25, Wednesday night’s closing price. Sycamore also gets two board seats and the right to approve a third.

The company expects to post a per share net loss of $0.53 to $0.61 in the first quarter of 2015, considerably worse than the $0.36 loss forecast by analysts. The company plans to open just one new store in 2015 and remodel about 13 other Aeropostale stores. The company said it is currently considering closing 50 to 75 Aeropostale stores and one P.S. store.

The company’s CEO said:

Achieving our first operating profit in eight quarters is a noteworthy accomplishment. Not only did we register a profit on an adjusted basis, but we also beat our original and revised guidance for the fourth quarter through better than expected margins and expense savings. Our first quarter outlook for 2015 reflects challenging trends as we continue to see softness in consumer demand as a result of weak traffic.  Our organization has taken significant action over the past six months to reshape our business strategies, which should position us for improvement, particularly in the second half of 2015.

Shares closed down about 6.8% on Thursday at $3.70 and dropped another 4% in after-hours trading to $3.55, in a 52-week range of $2.13 to $7.58. Thomson Reuters had a consensus analyst price target of around $3.60 before the results were announced.

ALSO READ: 10 Retailers Closing the Most Stores

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.