Investors fawned over teen fashion house Aeropostale's ( ARO) initial stock offering Thursday. The deal was priced Wednesday at $18, higher than the $15-$17 range underwriters had initially set. And when trading began at midmorning Thursday, the shares rocketed, opening at $24.90. In recent action the shares were trading at $24.71. The New York-based apparel chain, once part of Federated Department Stores' ( FD) Macy's chain, raised $225 million in the offering, but only a small part of that went into the company's coffers. About $191 million went to a group of investors, including Bear Stearns, that financed the buyout of Aeropostale in 1998. The company took in about $33.75 million, money it will use to pay off preferred shareholders and fund expansion plans. The company has ambitious growth plans -- it told investors during its road show that it expects 25% annual earnings growth -- and the offering was expected to go well given the dearth of bona fide growth stories on Wall Street in a weak market for tech stocks. In addition, news that retail sales were better than expected in April, combined with strong earnings from a number of retail outfits, helped stoke demand for the stock. But Aeropostale has lofty store growth plans in an industry that already has too many stores, some analysts say. The company operates 278 stores, but has said it could expand to as many as 900 in the future. It plans to broaden its store base by 30% this year. At the level the stock opened, it trades at a premium to its top two biggest competitors, American Eagle Outfitters ( AEOS) and Abercrombie & Fitch ( ANF). Aeropostale trades at about 20 times forward earnings, while American Eagle's price-to-earnings ratio is 16 and Abercrombie trades at 17 times earnings. Analysts expect both of its competitors to show 20% earnings growth in coming years, compared with 25% for Aeropostale.