Aeropostale (ARO) Terminates CEO Johnson; Prelim. Q2 Results Top Expectaitons

Aeropostale, Inc. (NYSE: ARO) announced that Julian R. Geiger has rejoined the Company as Chief Executive Officer, effective immediately. Mr. Geiger also will continue to serve as a member of the Company's Board of Directors. Aeropostale's Board of Directors and Thomas P. Johnson, mutually agreed that Mr. Johnson will step down from his role as Chief Executive Officer and director of the Company. Mr. Johnson has agreed to remain available for the Company to ensure a smooth transition.

Karin Hirtler-Garvey, Chairperson of Aeropostale's Board of Directors, stated, "Julian's previous service in the role of CEO combined with his passion for the Aeropostale brand make him an ideal choice to lead this organization. Julian was the leader of Aeropostale's strategic direction during a period of significant growth, and we are confident in his enthusiasm for the business, his understanding of today's teen retail marketplace and his intuition regarding teen fashion. We are pleased to have Julian back to help guide Aeropostale, Inc. and further enhance each of the Company's sales channels."

"During his tenure as CEO, Tom led the Company's strategy to increase its focus on fashion and better connect with today's teen consumer," continued Ms. Hirtler-Garvey. "Tom's leadership and commitment over the past 22 years has helped to establish Aeropostale as one of the leading teen retailers. On behalf of the Board and the entire Aeropostale family, I would like to thank Tom for his many contributions in developing the Company's brands and special culture."

Mr. Johnson commented, "I am incredibly honored to have served as CEO of Aeropostale and worked with such an amazing team of people who are as passionate about the Company as I am. Having spent more than half of my retail career at Aeropostale, it has been incredibly rewarding to see the company grow from a few domestic stores to a global business. I am confident that the strength of the Aeropostale brand and the transformational initiatives we have executed over the past year, including the recent financing and comprehensive cost reduction plan, have set a strong path for Aeropostale to compete successfully in an evolving teen retail market."

"My decision to return to Aeropostale to be its Chief Executive Officer is one that was easy to make," said Mr. Geiger. "The opportunity for sales and profit growth; the ability to reinforce the Company's special culture; and the chance to work closely with, and influence, the management team and the field organization combine to create a compelling and dynamic challenge. It is with enormous excitement that I prepare to lead the Aeropostale team into a future filled with optimism and opportunity."

Updates Second Quarter 2014 Outlook

For the second quarter of fiscal 2014, net sales decreased 13% to $396.2 million, from $454.0 million a year ago. Comparable sales, including the e-commerce channel, for the second quarter decreased 13% compared to the corresponding 13-week period ended August 3, 2013.

The Company now expects its second quarter operating loss to be in the range of approximately $61.0 to $64.0 million. This translates to a net loss in the range of $0.80 to $0.83 per diluted share, which includes net charges totaling approximately $29.0 to $31.0 million or $0.37 to $0.39 per share (of which approximately $5 million relates to non-operating items), that were not previously reflected in the Company's original second quarter guidance. The total charge includes asset impairment charges, a charge against net deferred tax assets, consulting fees for operational initiatives, consulting fees associated with our cost reduction plan, investment banking fees, and interest and fee expense related to the Company's transaction with Sycamore Partners.

Excluding the charges, the Company expects its second quarter operating loss to be in the range of $36.0 to $38.0 million, or $0.42 to $0.45 per diluted share. This compares to the Company's original guidance of operating losses in the range of $49.0 to $54.0 million, or a net loss in the range of $0.55 to $0.61.

*** The Street sees Q2 revs of $395.4 million and loss of $0.58 per share.

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