Troubled mall-based teen specialty retailer Aéropostale, Inc. has announced plans to institute a new cost reduction program that includes cutting approximately 100 jobs (about 13 percent) from its corporate office by the end of fiscal year 2015.
On Tuesday, Aéropostale announced that it continues to expect fourth quarter 2015 operating losses in the range of $0.0 million to $10.0 million, which translates to a net loss in the range of $0.04 to $0.17 per diluted share. Its stock is currently trading at 24 cents per share on the New York Stock Exchange, down dramatically from its 2015 high of $4.33 per share.
The company’s aggressive new cost reduction program will generate approximately $35 million to $40 million in annualized pre-tax savings which is expected to be achieved in fiscal 2016. The company estimates that it will record pre-tax cash expenses of approximately $1.5 million during fiscal 2015 related to this program.
“The decisions that led to today’s actions are a result of our focus on Aéropostale’s future, and our goal of returning to profitability,” said Aéropostale CEO Julian R. Geiger. “The reiteration of our fourth quarter guidance demonstrates sequential improvement from a sales and operating loss perspective. We are building upon areas of progress and continue to work to improve our business.”
Additionally, Geiger has voluntarily relinquished 1,000,000 stock options that were previously granted to him by the company. These shares will now be utilized by Aéropostale solely for the purposes of motivating and retaining other key members of the organization.