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Topic: Growth Stocks

AEROPOSTALE INC. $2.78 – New York symbol ARO

AEROPOSTALE INC. $2.78 (New York symbol ARO; TSINetwork Rating: Extra Risk)(646-485-5410; www.aeropostale.com; Shares outstanding: 79.1 million; Market cap: $220.0 million; No dividends paid) has risen over 20% since the clothing retailer said in early January 2015 that it expects to report a much smaller than expected loss in its 2014 fourth quarter.

The company now expects a fourthquarter loss of $0.25 to $0.31 share, compared to its earlier forecast of a $0.44-ashare loss. It has been cutting costs and selling more high-profit-margin clothing.

Aeropostale continues to face intense competition from other teen-clothing retailers. To restore its profitability, it plans to better market its products and keep cutting costs and refreshing its clothing lines. It’s also closing underperforming stores.

The company will likely be able to repeat its past success at attracting customers, but its sales may remain weak in the near term.

Aeropostale is still a hold.

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