Aeropostale (ARO) said on Thursday that its December sales at stores open at least one year rose by 12.2%. Analysts, on average, had expected its same-store sales to rise 3.7%, according to Thomson Financial. Total sales for the period ended January 5 surged 17.5 percent to $313.5 million from $266.7 million in the 2006 period ended December 30. Aeropostale said it expects to report fourth-quarter earnings of about 87 cents a share, above its prior guidance of 82 cents to 84 cents a share.
Same-store sales or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.
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Year-to-date, total net sales increased 13.8 percent to a record $1.51 billion, from $1.32 billion for the same period last year. Year-to-date, same-store sales increased 3.2 percent compared to the corresponding period ended Jan. 6, 2007. The increase in sales was due to the excellent response from its customers in each of the merchandise categories. The company currently operates over 800 Aéropostale stores in 47 states and Canada, and 14 Jimmy’Z stores in 11 states.
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Aeropostale is one of the smaller firms in the youth apparel retail sub-market. Aeropostale has grown its store base by about 20% per year since 2002, and it had about 825 stores by the end of the third quarter of fiscal 2007. Aeropostale’s major competitors include:
-Abercrombie & Fitch Company (ANF): Abercrombie & Fitch is the leader of the youth apparel retail market by nearly all measures. ANF is a larger company than ARO, with a greater store base and much higher net sales than ARO.
-American Eagle Outfitters (AEO): American Eagle competes directly for the same customers (young men and women between the ages of 15 and 25) with Aeropostale. AEO is larger than Aeropostale in terms of total sales and profits, and AEO has exhibited stronger growth recently than Aeropostale.
-Pacific Sunwear of California (PSUN): Pacific Sunwear primarily serves several different customer segments through its three retail chains: PacSun, demo, and One Thousand Steps. PacSun stores not only compete with Aeropostale’s namesake stores, but are a direct competitor to Aeropostale’s new Jimmy’Z concept in the surf-inspired merchandise market.
-Urban Outfitters (URBN): Urban Outfitters is a relatively young retailer that operates three different branded store chains, Urban Outfitters (18 to 30 year olds), Anthropologie (30 to 45 year old women), and Free People (16 to 35 year old women). Urban Outfitters is not as directly comparable to ARO due to its slight differentiation in targeted customer segments.
Covered Call Options:
A large number of Option Trading Tricks are available on PowerOptions website for Option Investors. Using the search results on the website, the following covered call opportunities for Aeropostale and its competitors were obtained.
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| Stock Sym |
Stock Price |
Option | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
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| AEO | 18.34 (+0.64) | AEOBW | 08 FEB 17.5 (33) | 1.65 | 9 | 4.9 | 4.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AEO | 18.34 (+0.64) | AEOBD | 08 FEB 20.0 (33) | 0.55 | 3 | 3.1 | 12.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ANF | 70.77 (-0.09) | ANFBN | 08 FEB 70.0 (33) | 4.2 | 5.9 | 5.2 | 5.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ANF | 70.77 (-0.09) | ANFBV | 08 FEB 72.5 (33) | 2.9 | 4.1 | 4.3 | 6.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ARO | 23.48 (-1.01) | AROBX | 08 FEB 22.5 (33) | 2.35 | 10 | 6.5 | 6.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ARO | 23.48 (-1.01) | AROBE | 08 FEB 25.0 (33) | 1.1 | 4.7 | 4.9 | 11.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PSUN | 10.77 (+0.09) | PVQBB | 08 FEB 10.0 (33) | 1.25 | 11.6 | 5 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PSUN | 10.77 (+0.09) | PVQBV | 08 FEB 12.5 (33) | 0.25 | 2.3 | 2.4 | 18.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| URBN | 25.22 (-0.03) | URQBE | 08 FEB 25.0 (33) | 1.9 | 7.5 | 7.2 | 7.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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