Aeropostale's Still Soaring

It looks like teens continue to open their wallets (or their parents' wallets) to ensure they have all the latest threads, and retailer Aeropostale (NYSE: ARO  ) is benefiting from this trend as much as ever.

While I doubt many teenagers were out looking for the perfect Easter attire, they certainly seemed to be drawn in by the opportunity to finally start getting new duds for the warm weather. For March, Aeropostale reported same-store sales growth of 15.9%, easily topping estimates calling for an 8% increase. So far this year, comps have climbed 10.3%. Its total sales jumped 31.5% in March and 23.2% year-to-date. The retailer benefited from strength in all areas of its business.

Based on its strong results, Aeropostale is feeling confident its first-quarter performance will be pleasing to investors. As a result, management decided to increase its earlier forecast. It raised its earnings guidance a few pennies, from $0.19-$0.21 per share to a narrow range of $0.22-$0.23 per share. That would represent earnings growth of about 47%-53% from a year ago.

It's obvious Aeropostale is pleased about its performance and confident about where it's heading. But should it be? I'm not so sure. First, even though it had high double-digit comps growth this month, it was an extremely easy comparison, as last year's March comps plummeted 9.3%. Second, with a trailing P/E of about 21.6, Aeropostale is more than 17% more expensive than American Eagle (NYSE: AEOS  ) and 21% pricier than Abercrombie & Fitch (NYSE: ANF  ) . Finally, in addition to the two just mentioned, there are a plethora of retailers fighting for the attention of teen shoppers.

Without discrediting Aeropostale's notable performance of late, I just don't think it makes sense to consider this stock at recent prices. With such high valuations, there are also high expectations. Any stumble and the stock price will likely take a big fall. If that happens, I would consider taking another look. Otherwise, it's simply too trendy for my taste.

For more on the trends in teen fashion, check out:

• Much More Than Bonnets Were Sold
• Aeropostale Flying in Style
• Aeropostale Is Flying High

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Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies in this article. The Fool has a disclosure policy.