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Aeropostale

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Case Study Analysis 1: Aeropostale, Period 2010 – 2012
November 4, 2013

Executive Summary
This financial analysis report examines our company Aeropostale and a few of our close competitors within the teen retail industry in order to evaluate company performance and financial health. The 3 year financial analysis covers GAP (GPS), Abercrombie and Fitch (ANF), Ralph Lauren Polo (RL) and Aeropostale from income statements / balance sheets with resultant calculations on the subjects of revenue, gross profit, return on equity, liquidity, financial leverage and market valuation from year 2010 to year 2012.

There are many areas that require improvement as financial calculations have revealed negative company health. Improvements must come from the product itself with improved design and marketing.

Background
With approximately 980 stores throughout the United States and Canada, Aeropostale is a proud with its designing, marketing and retailing of teen casual apparel and accessories. We have been a shopping mall based specialty retailer of casual apparel for young men and women with control over our proprietary brands for sourcing, marketing and selling our own merchandise.

As of 2012, media analysts have indicated that Aeropostale stores are smaller in size compared to Gap’s stores, and generate significantly higher revenue per square feet. Moreover, before cotton prices climbed in 2011, Aeropostale locations generated about $150 in EBITDA per square feet compared to Gap’s $90 ^1
However, the Wall Street Journal (Market Watch ) on Aug. 16, 2012, presented that Aeropostale profit fell 98% and offers a weak outlook. Fiscal second-quarter earnings sank as the youth-focused apparel retailer's expenses increased and as a one-time gain boosted the company's year-ago results. Analysts have noted missed fashion trends weighed on Aeropostale, which has primarily

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