Second Quarter Performance
Net income for the second quarter of 2012 was approximately $0.1 million, or $0.00 per diluted share. Net income for the second quarter of 2011 was $2.9 million, or $0.04 per diluted share, which included a non-recurring pre-tax benefit to the Company's gross profit of $8.7 million, or $0.06 per diluted share, which resulted from the resolution of a dispute with one of the Company's sourcing agents.
Of this benefit, $8.0 million, related to periods prior to fiscal 2011. Excluding this item, the adjusted net loss for the second quarter of 2011 was ($1.7) million, or ($0.02) per diluted share.
For the second quarter of fiscal 2012, net sales increased 4% to $485.3 million, from $468.2 million in the year ago period. Comparable sales, including the e-commerce channel, for the second quarter were essentially flat compared to a 12% decrease last year. Comparable store sales, excluding the e-commerce channel, for the second quarter decreased 1%, compared to a 14% decrease last year.
Thomas P. Johnson, Chief Executive Officer, commented, "While we were encouraged by the customer response to our fashion offering, we were disappointed by our overall financial performance for the second quarter. Our core basics business experienced significant pricing pressure due to the highly promotional and competitive retail landscape. As a result, we promoted these businesses more aggressively than initially expected to end the quarter with inventories inline with our plan."
Net revenue from the Company's e-commerce business for the second quarter of fiscal 2012 increased 27% to $31.9 million, from $25.1 million in the year ago period.
Cash Positioning and Share Repurchase Program
The Company ended the quarter with cash and cash equivalents of $169.6 million and no debt. The Company currently has $145.2 million of availability remaining under its share repurchase program.
Store Growth and Capital Spending
The Company opened seven Aeropostale and 15 P.S. from Aeropostale stores, and closed four Aeropostale stores during the quarter. For the second quarter, the Company invested $20.8 million in planned capital expenditures.
Third Quarter Guidance
Based on a soft start to the important back-to-school selling season, the Company expects earnings in the range of $0.25 to $0.30 per diluted share, compared to net earnings of $0.30 per diluted share in the same period last year.
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