##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    August 4, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    001-31314
  Aéropostale,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

31-1443880(State of
    incorporation)

(I.R.S. Employer Identification
    No.)112 W. 34th Street,
    New York, NY

10120(Address of Principal Executive
    Offices)

(Zip
    Code)   (646) 485-5410
 (Registrants Telephone
    Number, Including Area Code)
   þ o
  Rule 12b-2
  þ o o
  Rule 12b-2).  Yes o þ




---



##### 



AÉROPOSTALE,
    INC.
  TABLE OF
    CONTENTS
  PART I 
    FINANCIAL INFORMATIONItem 1.


Financial
    Statements (unaudited)


3Condensed
    Consolidated Balance Sheets


3Condensed
    Consolidated Statements of Income and Comprehensive
    Income


4Condensed
    Consolidated Statements of Cash Flows


5Notes to Unaudited
    Condensed Consolidated Financial Statements


6Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


12Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


18Item 4.


Controls and
    Procedures


18PART II 
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


18Item 1A.


Risk
    Factors


18Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


24Item 3.


Defaults Upon
    Senior Securities


24Item 4.


Submission of
    Matters to a Vote of Security Holders


24Item 5.


Other
    Information


25Item 6.


Exhibits


25SIGNATURES


26EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   2




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION
  Item 1.  Financial
    Statements (unaudited)
  AÉROPOSTALE,
    INC.
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  August 4,


February 3,


July 29,2007


2007


2006(Unaudited)(In thousands)ASSETSCurrent Assets:Cash and cash equivalents

$
164,520


$
200,064


$
117,307Short-term investments


39,476



76,223



34,117Merchandise inventory


150,605



101,476



154,720Tenant allowances receivable


8,040



4,523



11,099Prepaid expenses


13,715



12,175



12,737Prepaid income taxes


11,444







3,091Deferred income taxes


8,083



1,185



Other current assets


3,567



3,147



3,088Total current assets


399,450



398,793



336,159Fixtures, equipment and
    improvements, net


209,270



175,591



178,972Intangible assets


1,400



1,400



2,455Deferred income taxes


5,382



3,784



Other assets


1,618



1,596



1,980TOTAL ASSETS

$
617,120


$
581,164


$
519,566LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable

$
99,219


$
63,918


$
99,391Accrued compensation


11,468



15,553



11,573Deferred income taxes










5,195Income taxes payable


7,735



37,802



1,812Accrued expenses


45,234



47,525



36,060Total current liabilities


163,656



164,798



154,031Deferred rent and tenant allowances


93,848



88,344



88,875Retirement benefit plan liabilities


16,753



15,906



9,787Uncertain tax contingency
    liabilities


3,496







Deferred income taxes










1,977Commitments and contingent
    liabilitiesStockholders
    Equity:Preferred stock  par
    value, $0.01 per share; 5,000 shares authorized, no shares
    issued or outstanding










Common stock  par
    value, $0.01 per share; 200,000 shares authorized, 89,729,
    88,998 and 88,866 shares issued and outstanding


897



890



887Additional paid-in capital


117,027



101,132



96,346Accumulated other comprehensive
    loss


(5,077
)


(5,274
)


(1,557
)Retained earnings


443,167



414,916



325,055Treasury stock at cost (12,145,
    11,531 and 9,569 shares)


(216,647
)


(199,548
)


(155,835
)Total stockholders equity


339,367



312,116



264,896TOTAL LIABILITIES AND
    STOCKHOLDERS EQUITY

$
617,120


$
581,164


$
519,566    3




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##### Table of Contents



AÉROPOSTALE,
    INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME
  13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006(Unaudited)(In thousands, except per share data)Net sales

$
311,236


$
274,624


$
587,018


$
520,916Cost of sales (includes certain
    buying, occupancy and warehousing expenses)


214,358



202,048



401,437



377,862Gross profit


96,878



72,576



185,581



143,054Selling, general and
    administrative expenses


74,533



62,222



142,752



120,487Other income






2,085







2,085Income from operations


22,345



12,439



42,829



24,652Interest income


1,839



1,372



3,974



2,868Income before income taxes


24,184



13,811



46,803



27,520Income taxes


9,482



5,388



18,349



10,734Net income

$
14,702


$
8,423


$
28,454


$
16,786Basic earnings per share

$
0.19


$
0.10


$
0.37


$
0.21Diluted earnings per share

$
0.19


$
0.10


$
0.36


$
0.21Weighted average basic shares


77,629



80,441



77,555



81,026Weighted average diluted shares


78,171



81,108



78,188



81,789   CONDENSED
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006(Unaudited)(In thousands)Net income

$
14,702


$
8,423


$
28,454


$
16,786Minimum pension liability (net of
    tax of $49 and $98)


75







150



Foreign currency translation
    adjustment (net of tax of $30)


47







47



Comprehensive income

$
14,824


$
8,423


$
28,651


$
16,786    4




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##### Table of Contents



AÉROPOSTALE,
    INC.
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  26 Weeks EndedAugust 4,


July 29,2007


2006(Unaudited)(In thousands)CASH FLOWS FROM OPERATING
    ACTIVITIES:Net income

$
28,454


$
16,786Adjustments to reconcile net
    income to net cash used in operating activities:Depreciation and amortization


16,255



13,646Stock-based compensation


4,248



2,874Excess tax benefits from
    stock-based compensation


(4,325
)


(6,882
)Other


(2,631
)


(2,358
)Changes in operating assets and
    liabilities:Merchandise inventory


(49,119
)


(62,812
)Accounts payable


35,301



42,226Other assets and liabilities


(49,922
)


(7,301
)Net cash used in operating
    activities


(21,739
)


(3,821
)CASH FLOWS FROM INVESTING
    ACTIVITIES:Purchases of fixtures, equipment
    and improvements


(45,795
)


(30,475
)Purchase of short-term investments


(313,572
)


(183,930
)Proceeds from sale of short-term
    investments


350,318



169,850Net cash used in investing
    activities


(9,049
)


(44,555
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Purchase of treasury stock


(16,403
)


(47,691
)Proceed from exercise of stock
    options


7,326



1,257Excess tax benefits from
    stock-based compensation


4,325



6,882Net cash used in financing
    activities


(4,752
)


(39,552
)Effect of exchange rate changes


(4
)


Net decrease in cash and cash
    equivalents


(35,544
)


(87,928
)Cash and cash equivalents,
    beginning of year


200,064



205,235Cash and cash equivalents, end of
    period

$
164,520


$
117,307Supplemental Disclosure of Cash
    Flow Information:Non-cash operating and investing
    activities

$
4,138


$
3,456    5




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS
  1.
    Basis of
    Presentation  e-commerce www.aeropostale.com Form 10-Q Form 10-Q).
  Rule 10-01 Regulation S-X
  Form 10-K
    2.
    Common
    Stock Split    3.
    Revenue
    Recognition  e-commerce
 6




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Cost of
    Sales and Selling, General and Administrative Expenses      5.
    Earnings
    Per Share    13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006(In thousands, except per share data)Net income

$
14,702


$
8,423


$
28,454


$
16,786Weighted average basic shares


77,629



80,441



77,555



81,026Impact of dilutive securities


542



667



633



763Weighted average diluted shares


78,171



81,108



78,188



81,789Earnings per basic share

$
0.19


$
0.10


$
0.37


$
0.21Earnings per diluted share

$
0.19


$
0.10


$
0.36


$
0.21     6.
    Revolving
    Credit Facility   7




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    7.
    Retirement
    Benefit Plans        13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006(In thousands)Service cost

$
134


$
123


$
268


$
246Interest cost


225



233



450



466Amortization of prior experience
    cost


19



19



38



38Amortization of net loss


105



142



210



284Net periodic pension benefit cost

$
483


$
517


$
966


$
1,034      8




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Stock
    Repurchase Program    9.
    Stock-Based
    Compensation  Share-Based Payment, a revision of SFAS No. 123,
    Accounting for Stock-Based Compensation Accounting for Stock
    Issued to Employees
        2007


2006Expected volatility


45
%


50
%Expected life


5.25 years



5.25 yearsRisk-free interest rate


4.51
%


4.86
%Expected dividend yield


0
%


0
%Expected forfeiture rate


20
%


20
%    9




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        10.
    Commitments
    and Contingent Liabilities    11.
    Income
    Taxes  Accounting for Uncertainty in Income Taxes
       10




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##### Table of Contents



AÉROPOSTALE,
    INC.
  NOTES TO
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.
    Recent
    Accounting Developments  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115.
  Fair Value Measurements.
 11




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Cautionary
    Note Regarding Forward-Looking Statements
  Form 10-Q
  Introduction
  e-commerce www.aeropostale.com Form 10-Q Form 10-Q).
  Form 10-K
    rd rd
  Overview
   12




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##### Table of Contents



twenty-six
        13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006(In millions)Net sales

$
311.2


$
274.6


$
587.0


$
520.9Total store count at end of period


792



726



792



726Comparable store count at end of
    period


698



591



698



591Net sales growth


13.3
%


18.0
%


12.7
%


17.2
%Comparable store sales change


(4.1
)%


1.0
%


(1.1
)%


(0.9
)%Comparable average unit retail
    change


(4.5
)%


1.6
%


(3.3
)%


3.7
%Comparable units per sales
    transaction change


2.4
%


(2.2
)%


1.0
%


(3.3
)%Comparable sales transaction change


(2.0
)%


1.7
%


1.3
%


(1.2
)%Net sales per average square foot

$
110


$
106


$
212


$
205Gross profit (in millions)

$
96.9


$
72.6


$
185.6


$
143.1Income from operations (in
    millions)

$
22.3


$
12.4


$
42.8


$
24.7Diluted earnings per share

$
0.19


$
0.10


$
0.36


$
0.21Average square footage growth over
    comparable period


9
%


16
%


9
%


18
%Change in total inventory over
    comparable period


(3
)%


(5
)%


(3
)%


(5
)%Change in inventory per square
    foot over comparable period


(11
)%


(17
)%


(11
)%


(17
)%Percentages of net sales by
    category:Young Womens


59
%


57
%


60
%


57
%Young Mens


26
%


27
%


25
%


26
%Accessories


15
%


16
%


15
%


17
%  13




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##### Table of Contents



13 Weeks Ended


26 Weeks EndedAugust 4,


July 29,


August 4,


July 29,2007


2006


2007


2006Net sales


100.0
%


100.0
%


100.0
%


100.0
%Gross profit


31.1
%


26.4
%


31.6
%


27.4
%Selling, general and
    administrative expenses


23.9
%


22.7
%


24.3
%


23.1
%Other income






0.8
%






0.4
%Income from operations


7.2
%


4.5
%


7.3
%


4.7
%Interest income, net


0.6
%


0.5
%


0.7
%


0.6
%Income before income taxes


7.8
%


5.0
%


8.0
%


5.3
%Income taxes


3.1
%


1.9
%


3.2
%


2.1
%Net income


4.7
%


3.1
%


4.8
%


3.2
%   Results
    of Operations
  Sales e-commerce
      Gross profit
    SG&A
 14




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##### Table of Contents



e-commerce
    Interest income and income taxes
    Net income
    Liquidity
    and Capital Resources
      26 Weeks EndedAugust 4,


July 29,2007


2006(In thousands)Net cash used in operating
    activities

$
(21,739
)

$
(3,821
)Net cash used in investing
    activities


(9,049
)


(44,555
)Net cash used in financing
    activities


(4,752
)


(39,552
)Effect of exchange rate changes


(4
)


Net decrease in cash and cash
    equivalents

$
(35,544
)

$
(87,928
)  15




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##### Table of Contents



Operating activities
    Capital requirements
    Financing activities and capital
    resources
   16




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##### Table of Contents



Contractual
    Obligations
    Payments DueBalance of


In 2008


In 2010


AfterTotal


2007


and 2009


and 2011


2011(In thousands)Contractual ObligationsEmployment agreements

$
6,277


$
1,454


$
4,735


$
88


$
Sponsorship and advertising
    contracts


3,230



1,248



1,982







Liabilities for uncertain tax
    positions


7,735



7,735











Operating leases


581,549



47,211



164,025



148,651



221,662Total contractual obligations

$
598,791


$
57,648


$
170,742


$
148,739


$
221,662       Form 10-K
        Off-Balance
    Sheet Arrangements
    Critical
    Accounting Estimates
   17




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##### Table of Contents



Form 10-K
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    Item 4.
    Controls
    and Procedures  Evaluation of Disclosure Controls and
    Procedures: Rule 13a-15(b) Rule 13a-15(e)
  Changes in internal controls:
  PART II 
    OTHER INFORMATION
  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    factors  Cautionary
    Note Regarding Forward-Looking Statements
  Form 10-Q
 18




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##### Table of Contents



Fluctuations
    in comparable store sales and quarterly results of operations
    may cause the price of our common stock to decline
    substantially.
    
    fashion trends;
    changes in our merchandise mix;
    the effectiveness of our inventory management;
    actions of competitors or mall anchor tenants;
    calendar shifts of holiday or seasonal periods;
    changes in general economic conditions and consumer spending
    patterns;
    the timing of promotional events; and
    weather conditions.    If we
    were unable to identify and respond to consumers fashion
    preferences in a timely manner, our profitability would
    decline.
    We
    rely on a small number of vendors to supply a significant amount
    of our merchandise.
   19




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##### Table of Contents



Our
    business could suffer as a result of a manufacturers
    inability to produce merchandise on time and to our
    specifications.
    A
    downturn in the United States economy may affect
    consumer-spending habits.
    Failure
    of new business concepts would have a negative effect on our
    results of operations.
  and/or
  Our
    business could suffer if a manufacturer fails to use acceptable
    labor practices.
    Foreign
    suppliers manufacture most of our merchandise and the
    availability and costs of these products may be negatively
    affected by risks associated with international
    trade.
   20




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##### Table of Contents



Our
    growth strategy relies on the continued addition of a
    significant number of new stores each year, which could strain
    our resources and cause the performance of our existing stores
    to suffer.
    Our
    continued expansion plan is dependent on a number of factors
    which, if not implemented, could delay or prevent the successful
    opening of new stores and penetration into new
    markets.
    
    identify suitable markets and sites for new store locations;
    negotiate acceptable lease terms;
    hire, train and retain competent store personnel;
    foster current relationships and develop new relationships with
    vendors that are capable of supplying a greater volume of
    merchandise;
    manage inventory effectively to meet the needs of new and
    existing stores on a timely basis;
    expand our infrastructure to accommodate growth; and
    generate sufficient operating cash flows or secure adequate
    capital on commercially reasonable terms to fund our expansion
    plans.  and/or
  The
    loss of the services of key personnel could have a material
    adverse effect on our business.
    A
    substantial interruption in our information systems could have a
    material adverse effect on our business.
   21




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##### Table of Contents



There
    is an increased risk in operating stores in foreign
    countries.
    Our
    net sales and inventory levels fluctuate on a seasonal
    basis.
    Our
    ability to attract customers to our stores depends heavily on
    the success of the shopping malls in which we are
    located.
    We
    currently rely on a single distribution center.
    We
    rely on a third party to manage our distribution
    center.
   22




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##### Table of Contents



We
    rely on a third party to manage the warehousing and order
    fulfillment for our
    E-Commerce
    business.
  e-commerce e-commerce e-commerce e-commerce e-commerce
  Failure
    to protect our trademarks adequately could negatively impact our
    brand image and limit our ability to penetrate new
    markets.
  ® ® ®
  ® ®
  The
    effects of war or acts of terrorism could have a material
    adverse effect on our operating results and financial
    condition.
  and/or
 23




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##### Table of Contents



Item 2
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Approximate DollarTotal Number





Total Number of


Value of Sharesof Shares





Shares Purchased


That May Yet be(or Units)


Average


as Part of Publicly


Purchased Under thePurchased


Price Paid


Announced Plans


Plans or ProgramsPeriod

(a)


per Share


or Programs


(b)(In thousands)May 6 to June 2, 2007


30,000


$
30.75



30,000


$
143,855(c
)June 3 to July 7, 2007


241,500


$
28.55



241,500


$
136,961July 8 to August 4, 2007


105,000


$
27.74



105,000


$
134,049Total


376,500


$
28.50



376,500     (a)
    
    On March 14, 2007, our Board of Directors approved a
    $100.0 million increase in repurchase availability under
    the program, bringing total repurchase authorization, since
    inception of the program, to $350.0 million.(b)
    
    The repurchase program may be modified or terminated by the
    Board of Directors at any time, and there is no expiration date
    for the program.(c)
    
    Includes additional $100.0 million of repurchase
    availability that was approved on March 14, 2007.  Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders      Name of Nominee

Votes For


Votes WithheldJulian R. Geiger


71,282,388



1,370,750Bodil Arlander


72,195,078



458,060Ronald R. Beegle


72,194,231



458,907John Haugh


72,193,290



459,848Robert B. Chavez


72,197,163



455,975Mindy C. Meads


72,193,122



460,016Karin Hirtler-Garvey


72,195,344



457,794John D. Howard


72,144,647



508,491David B. Vermylen


68,960,678



3,692,460  24




---



##### Table of Contents



Votes For

Votes Against

Abstentions

Broker Non-Votes59,698,860



6,747,257



238,883



5,968,138     Votes For

Votes Against

Abstentions71,639,223



987,101



26,814   Item 5.
    Other
    Information    Item 6.
    Exhibits  ExhibitNo.

Description31
.1

Certification by Julian R. Geiger,
    Chairman and Chief Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.*31
.2

Certification by Michael J.
    Cunningham, Executive Vice President and Chief Financial
    Officer, pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.*32
.1

Certification by Julian R. Geiger
    pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32
.2

Certification by Michael J.
    Cunningham pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*     *
    
    Filed herewith. 25




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##### Table of Contents



SIGNATURES
    Aeropostale,
    Inc.
  JULIAN
    R. GEIGER
   Chairman of the Board and Chief Executive Officer
 (Principal Executive Officer)
  MICHAEL
    J. CUNNINGHAM
   Executive Vice President  Chief Financial
    Officer
 (Principal Financial Officer)
   26