Mall-based apparel retailer Aeropostale, Inc. (ARO) on Thursday reported a 12% same-store sales increase for the month of June, beating analyst expectations.
On average, Wall Street analysts predicted a 10.3% same-store sales increase. Same-store sales are considered a key indicator of a retailer's health, since they measure the performance of stores open at least one year.
Aeropostale said that total net sales jumped 20%, to $163.2 million, in the five-week period ending July 4. The company also said that year-to-date same-store sales are up 12%, while total net sales ballooned 23% to $704.2 million.
As a result of the better-than-expected performance, the company raised its second quarter earnings forecast. It said it now sees second quarter profits of 45 cents to 47 cents per share, compared with a previous forecast of 43 cents to 45 cents per share, including special charges.
On average, Wall Street analysts expect 48 cents per share, excluding charges.
Aeropostale shares fell 71 cents, or -2.1%, in morning trading Thursday.
The Bottom Line
Shares of ARO are getting close to 52-week highs of $37 a share. The stock has technical support in the $28-30 price area. If the shares can build on recent strength, we see overhead resistance around the $36-37 price levels. We do not currently rate this non-dividend paying stock at this time, but we do watch this leading teen retailer closely.
Aeropostale, Inc. (ARO) does not currently pay a dividend.
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