Aeropostale Sees Fourth-Quarter Earnings Increase

Posted Mar 12th 2010 9:30AM by Mark Fightmaster
Filed under: Earnings Reports, Analyst Upgrades and Downgrades

Late Thursday, Aeropostale (ARO) announced that its fourth-quarter net income came in at 99 cents per share -- far better than last year's same-quarter results (66 cents) and the consensus estimate (87 cents). Quarterly sales increased 16% to $801.2 million, outpacing the consensus estimate of $795 million.

Looking ahead, ARO forecast first-quarter earnings of 39 to 40 cents per share. The Street expected ARO to forecast earnings of 34 cents per share for the first quarter. This news prompted Piper Jaffray to upgrade the teen retailer to "neutral" from "underweight," assigning a new price target of $31 for the stock.

This news sets up an interesting battle between shares of the retailer and the $29 level. Since the middle of 2009, the shares have closed atop this level three times. Considering yesterday's news, we could see the stock struggle with this level throughout the day.

A break of the resistance could clear the way for the stock to challenge all-time highs. A rejection at $29 could send the stock retreating back to support from the $25 level. This level acted as resistance in the past and could now switch roles given the chance.

Tags: aeropostale, aro, featured, retail, retail earnings