Aeropostale, Inc (ARO) shares are pressuring 52-week highs on the recent quarter’s results. Increasing sales lead to record earnings.
Company Description
Aeropostale is a mall-based, retailer of casual apparel and accessories, principally targeting teenagers. The Company provides customers with a focused selection of high-quality, active-oriented, fashion and fashion basic merchandise at compelling values.
Record-Setting Quarter
On Mar 11 Aeropostale reported its fourth-quarter results that included a 48% jump in earnings, to a record 99 cents per share. Sales grew 16% to $801 million on 9% growth in same-store numbers.
While EPS did fall a penny below expectations, but as with many retailers estimates spiked prior to the report on preliminary sales numbers.
Estimates Surging
Over the past 3 months Aeropostale analysts raised the Zacks Consensus Estimate for fiscal 2011 to $2.65. This is up from $2.29. Next year’s estimates are up 39 cents on average, to $2.89.
Currently earnings are expected to grow 16% this year and 9% next year.
Shares are Cheap
Despite dramatic price improvement, those rising estimates have kept Aeropostale valuation low. The forward P/E is still under 11 times, while its PEG ratio is just 0.6 times.
The Chart
Shares of ARO were up on both the earnings release and the preliminary sales figures, which came on Mar 4. The stock is now pressuring its 52-week high on the news.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
