Investing.com -- Shares in Aeropostale Inc (NYSE:ARO) plunged more than 40%, as the embattled retailer disclosed that it is mulling a sale of the company after reporting disappointing quarterly earnings and forward guidance on Thursday.
During the company's fourth quarter of 2015, Aeropostale reported a net loss of $21.5 million or 0.27 per share, widening losses from the same quarter a year earlier when it posted a deficit of $13.5 or 0.14 per share. Adjusted per share earnings, excluding one-time items, dipped to Negative-0.14 from a gain of 0.01 in the fourth quarter of 2014. Aerpostale, whose sales have been dented in recent years due to massive declines among brick-and-mortar stores, saw its revenues fall 16.1% to $498 million.
"Our fourth quarter 2015 adjusted operating loss of $7.6 million was within our previously issued guidance," Aeropostale CEO Julian Geiger said in a statement. "Additionally, the initial reaction to both our Spring product and our two-chain Factory and Mall strategy is very encouraging with comparable sales turning positive since our Factory Chain launch at the end of February."
Aeropostale closed 13 stores during the quarter, while investing $1.8 million in capital expenditures. In addition, Aeropostale said the current portion of its long-term debt stood at $5.0 million and its portion of non-current long-term debt lingered around $138.0 million. In January, the company announced plans to eliminate 100 corporate jobs as part of a cost-cutting initiative that aims to save up to $40 million.
While Aeropostale's Board of Directors has authorized its management to explore a full range of strategic and financial alternatives, including a potential sale or restructure of the company, it did not set a timetable for such moves on Thursday. Separately, Aeropostale announced it is currently embroiled in a vendor dispute with an affiliate of Sycamore Partners, related to a sourcing agreement.
"The business trend has improved significantly since we introduced our spring merchandise assortments and launched our factory store initiative," Geiger added. "Under normal conditions, we would be very optimistic about our potential for financial growth throughout the first half of 2016. Regrettably, our short-term visibility is limited by our current vendor dispute."
Aeropostale shares lost 0.20 or 41.69% to 0.28 in after-hours trading.