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What: Shares of Tuesday Morning Corporation (NASDAQ:TUES) were looking brighter today, climbing as much as 21% on a strong second-quarter earnings report.
So what: The closeout retailer saw flat sales growth in the quarter with total revenue at $285.8 million, though same-store sales grew 3.1%, a promising sign as the company has been closing stores in an attempt to revamp the brand. As a result, adjusted net income improved from $0.37 to $0.45 per share, though that was a penny short of estimates at $0.46. Recently instated CEO Michael Rouleau credited "our experienced team with executing a disciplined program aimed at improving operations." He also said he expected "continued improvement" in the second half of the year.
Now what: Even though Tuesday Morning slightly missed bottom-line estimates, the result was not only an improvement from its total a year ago, but a much better performance than in recent quarters, when it posted losses well short of the analyst view. As Rouleau said, Tuesday Morning seems to be finally moving in the right direction, with comps improving as the company has made the strategic decision to exit underperforming categories. As the fourth quarter is the strongest of the year, analysts only expect profits of $0.07 per share, but I'd expect those projections to get a lift soon.
Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.