Cost Plus Forecast Drives Shares Higher (CPWM)

Retail

Published: March 23, 2012 11:33 am

Retailer Cost Plus Inc. (NASDAQ: CPWM) reported better-than-expected earnings and solid revenues after the market closed last night. The company posted EPS for the fourth quarter of $1.56 compared with the consensus estimate of $1.50. Revenue for the quarter of $364.3 million was in-line with analysts’ estimates.

The company’s forecast for first quarter and full-year 2012 earnings were higher than expected and are the primary drivers behind today’s sharp share price increase. The company expects a first quarter EPS loss of -$0.03 to -$0.07, better than analysts’ consensus of -$0.09. Revenue for the quarter is forecast at $210-$214 million, above the estimate of $207 million. Forecast gross margin of 31.8%-31.9% is lower than the 34.3% margin posted in the fourth quarter, but the company expects full-year margins of 32.6%-32.7%, higher than full-year 2011 margin of 32.1%.

Same-store sales rose 7.6% in the fourth quarter and are expected to rise 6%-8% in the first quarter of 2012 as compared to the first quarter of 2011. For the full year, same-store sales are forecast to rise 5%-6% compared with a same-store sales increase of 5.4% in 2011.

Shares are up nearly 18% at $18.84 after posting a new 52-week high of $18.98. The 52-week low is $5.57.

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