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Aeropostale, Inc. (ARO)’s Epic Nosedive to Unprofitability: The Gap Inc. (GPS), Abercrombie & Fitch Co. (ANF)

The Foolish Bottom Line

If the above reasons still haven’t convinced you of the gravity of Aeropostale’s situation, then perhaps this table – which measures its fundamental performance against Gap, Abercrombie & Fitch and American Eagle Outfitters – will.

Forward P/E 5-year PEG Price to Sales (ttm) Return on Equity (ttm) Debt to Equity Profit Margin Same-store sales growth (recent qtr.)
Aeropostale, Inc. (NYSE:ARO) 17.63 2.25 0.48 8.52% No debt 1.46% -8%
The Gap Inc. (NYSE:GPS) 12.46 1.46 1.10 40.18% 43.06 7.25% +5%
Abercrombie & Fitch Co. (NYSE:ANF) 12.00 0.72 0.87 14.47% 3.60 5.84% +1%
American Eagle Outfitters (NYSE:AEO) 11.99 1.15 1.16 20.02% No debt 6.68% +4%
Advantage American Eagle Abercrombie Aeropostale Gap Aeropostale, American Eagle Gap Gap

Source: Yahoo Finance, March 16, quarterly reports

Aeropostale, Inc. (NYSE:ARO)’s weak same-store sales growth, dangerously slim profit margin, mediocre growth prospects (based on its PEG ratio), and high P/E valuation all point to lower prices down the road.

Finally, a look at Aeropostale’s top and bottom line growth over the past three years versus these three rivals simply serves as a final confirmation of the company’s bleak future.

ARO data by YCharts

All U.S. apparel retailers are expected to suffer to some degree in the first half of 2013 due to macro issues – but some will fall much farther than others. Avoid Aeropostale – this company could become as defunct as the French aviation company for which it is named.

The article Aeropostale’s Epic Nosedive to Unprofitability originally appeared on

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