Aeropostale Expands in Canada - Analyst Blog

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Aeropostale Inc . ( ARO ), a retailer of active and casual clothing and accompaniments for the youth, announced that it plans on opening stores throughout Quebec.

The company plans to roll-out 7 stores in the region in fiscal 2012, one of which will open immediately at Place du Royaume in Ville de Saguenay in the Chicoutimi borough.

Aeropostale opened its first store in Canada in August 2007 and has come a long way since then as it is now a popular brand among teens in Canada.

The international turf provides ample long-term opportunities for the company to enhance its sales and profitability. Moreover, with the advancements in technology, Aeropostale has the opportunity to explore and add newer markets for its products through its e-commerce site.

In the recently concluded quarter, Aeropostale continued to expand internationally. The company opened its first store in Turkey, which was its 17th international store across Singapore, Middle East and Turkey. Moreover, the company entered into an agreement, wherein it will open 10 to 15 stores in the Philippines over the next five years.

However, we believe that only strong and popular brands have the potential to drive growth through the global markets. Therefore the going may not be so easy given the stiff competition from other global retailers like Abercrombie & Fitch Co. ( ANF ) and Gap Inc . ( GPS ), which may hamper the sales of the company.

The company currently operates through 916 Aeropostale stores across 50 U.S. states and Puerto Rico, 70 Aeropostale stores in Canada and has 87 P.S. in Aeropostale stores in 21 states. 

Earlier, the company reported earnings per share of 13 cents, down 35% from the prior-year earnings of 20 cents a share. However, the reported earnings came in line with Zacks Consensus Estimate. Going forward, the company now forecasts earnings in the range of 3 cents to 5 cents a share for the second quarter of 2012.

Aeropostale registered an increase of 6% in its total sales to $497.2 million, owing to a 2% rise in comparable store sales.

Currently, Aeropostale holds a Zacks #2 Rank, which implies a short-term 'Buy' rating (1-3 months).


 
ABERCROMBIE (ANF): Free Stock Analysis Report
 
AEROPOSTALE INC (ARO): Free Stock Analysis Report
 
GAP INC (GPS): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ANF , ARO , GPS

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