Aeropostale, Inc.

Aeropostale, Inc. (ARO - Snapshot Report) is fresh off the heels of an impressive quarter in which its earnings were up almost 50% from the same period last year. Earnings estimates have been rising, with the next-year estimate projecting 11.86% growth. The company's share price is currently pressuring a key short-term level of resistance and looks well positioned to advance.

Aeropostale, Inc. operates as a mall-based specialty retailer of casual apparel and accessories. The company was founded in 1987, has a market cap. of $2.41 billion and is headquartered in New York, New York.

With many consumers buckling under the considerable financial pressure of inflation and a weakened credit environment, plenty of retailers have been struggling to drive revenue and grow profits. Aeropostale however, has been able to buck the trend, as seen by the company's impressive second-quarter results, reported on Aug 21.

Second-Quarter Results

Revenue was up 21% from last year to $377.1 million. Net income surged to $21.1 million, up from $14.7 million in the same period last year. This produced earnings of 31 cents per share, right in line with analyst expectations.

Flexing some earnings consistency, this was the fourth time in four quarters that the company has either beaten or matched analyst estimates, having done so by an average of 3 cents, or 4.34%.

Same-store sales, a key data metric used to evaluate retailers, was up 11% from last year.

Earnings Estimates

After the solid quarter, analysts boosted their earnings projections. The current-year estimate now stands at $2.18 per share, up from $2.09 per share 30 days ago. The next-year estimate is bullish, pegged at $2.43 per share, an 11.86% earnings growth projection.

Based upon the current-year estimate, this stock is trading at a slight premium to the overall market, with a forward P/E multiple of 16.5X.

The Chart

Shares of ARO have been advancing since finding a short-term bottom just above $28 in mid-July. Since then, this stock has logged a new 52-week high above $37, and is currently pressuring a short-term level of resistance just above $36. With a strong earnings projection in hand and reasonable valuations, this stock looks well positioned to produce more gains. Take a look at the chart below.

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