NEW YORK (TheStreet) -- Aeropostale (ARO) stock closed lower by 14.25% to 54 cents on heavy trading volume on Monday as the retail sector closed in the red following weak Thanksgiving weekend sales.

In-store sales declined 1.5% to $12.1 billion on Thanksgiving and Black Friday, compared with $12.29 billion for the same period last year, Deutsche Bank said this morning in an analysts note, sourcing data from ShopperTrak.

Aeropostale will report its fiscal 2015 third quarter results on Wednesday after the market close.

The teen apparel retailer is expected to report a narrower loss and a year-over-year decline in revenue for the latest quarter.

Analysts have forecasted a loss of 35 cents per share on $392.67 million in revenue for the quarter.

Last year, Aeropostale posted a loss of 45 cents per share on $452.89 million in revenue for the quarter ended November 1, 2014.

By the end of the trading day, 2.56 million shares of Aeropostale had exchanged hands, compared with its average daily volume of 1.48 million shares.

Separately, TheStreet Ratings team rates AEROPOSTALE INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

We rate AEROPOSTALE INC (ARO) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is very high at 16.12 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.42, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, AEROPOSTALE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AEROPOSTALE INC is rather low; currently it is at 20.90%. Regardless of ARO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ARO's net profit margin of -13.35% significantly underperformed when compared to the industry average.
  • ARO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 81.45%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ARO, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues fell by 17.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: ARO

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.