Steiner's Smooth Sailing

Companies that consistently blow past analyst targets are typically of the new-technology variety that Wall Street fortunately misunderstands. However, sometimes analysts can get tripped up with old technology, too.

Steiner Leisure (Nasdaq: STNR  ) is one of those seemingly misunderstood old-school companies. This week, the company earned $0.53 a share, a penny above the market's bottom-line projections until just last week, when revenues rose by 18% to hit $97.8 million. If it hadn't been for the average analyst target climbing from $0.52 to $0.53 a share just a few days earlier, it would have marked the 13th consecutive time that the company had lapped analyst targets.

The company's name may convey images of some high-tech consumer-gadgetry maker putting out the kind of gizmos you'd see at Sharper Image (Nasdaq: SHRP  ) , or perhaps of a maker of robotic beds that would put Motley Fool Hidden Gems recommendation Select Comfort (Nasdaq: SCSS  ) to shame. But no, Steiner Leisure isn't cutting-edge at all. Most of this company's front-line battles are won with bare hands -- albeit often coated in exotic massaging lotions.

That's because Steiner Leisure is a leader in spa treatments. Its bread-and-butter business comes from running the spas aboard 120 major cruise ships. If you've been on a vessel owned by Royal Caribbean (NYSE: RCL  ) , Carnival (NYSE: CCL  ) , NCL, or Disney (NYSE: DIS  ) , you may very well be a pampered Steiner customer.

Steiner also runs dozens of spas for resort-hotel chains, but its presence as the only real shipboard spa operator is what's won the company its respectable growth over the years.

Steiner works, and the company proved it earlier this year, when Carnival's Princess line hired a star manager to take two ships' spas in-house to see whether it could cut out the middleman. It was a disaster. Princess went back to Steiner and its well-trained hands to run the show on its entire fleet.

The method behind the Steiner madness is pretty simple. The company has been able to ride the cruise industry's revival and expand on it exponentially by cashing in on a growing trend within the cruising population. Not only are more folks taking cruises, but there are also more young people cruising. And it doesn't hurt that more men are going in for spa treatments, too.

That dynamic growth in an otherwise sleepy sector made the company a good fit for our Rule Breakers newsletter service. Since we recommended it in the November issue, the stock has soared by nearly 60%. It has been one of the many reasons why the newsletter has more than doubled the market's return since last year's launch.

Then again, Steiner knows a lot about launches.

Need some more reading while you lie out on the massage table?

• Read the juicy secrets between the covers of Steiner's Princess Diary.
• The cruise industry has been doing just fine lately.
• Check out some of the other Rule Breakers stock picks.

Longtime Fool contributor Rick Munarriz was responsible for recommending Steiner Leisure last year. He does own shares in Disney. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.