Aeropostale Inc. (ARO): Today's Featured Retail Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Aeropostale ( ARO) pushed the Retail industry lower today making it today's featured Retail laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Aeropostale fell 19 cents (-1.4%) to $13.93 on light volume. Throughout the day, 1.4 million shares of Aeropostale exchanged hands as compared to its average daily volume of 2.7 million shares. The stock ranged in price between $13.90-$14.26 after having opened the day at $14.26 as compared to the previous trading day's close of $14.12. Other companies within the Retail industry that declined today were: Gordman's Stores ( GMAN), down 14.9%, Zumiez ( ZUMZ), down 9.4%, QKL Stores ( QKLS), down 7.1%, and U.S. Auto Parts Network ( PRTS), down 6.3%.

Aeropostale, Inc., together with its subsidiaries, operates as a mall-based specialty retailer of casual apparel and accessories. Aeropostale has a market cap of $1.14 billion and is part of the services sector. The company has a P/E ratio of 17.3, below the average retail industry P/E ratio of 18.7 and below the S&P 500 P/E ratio of 17.7. Shares are down 8.2% year to date as of the close of trading on Thursday. Currently there are 10 analysts that rate Aeropostale a buy, one analyst rates it a sell, and 10 rate it a hold.

TheStreet Ratings rates Aeropostale as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

On the positive front, Cache ( CACH), up 10.5%, Alon Holdings Blue Square - Israel ( BSI), up 7.1%, Stein Mart ( SMRT), up 6.6%, and Bon-Ton Stores ( BONT), up 5.3%, were all gainers within the retail industry with Walgreen Company ( WAG) being today's featured retail industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the retail industry could consider SPDR S&P Retail ETF ( XRT) while those bearish on the retail industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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