Shares of New York & Co. rose on Thursday, after the women's apparel retailer said profit rose in the first quarter, as tighter cost controls offset a decline in sales.
Chairman and Chief Executive Richard P. Crystal said in a statement the company focused on inventory reduction and expense management during the quarter and eliminated some promotions to boost its profit, even as sales fell 2 percent.
The New York company raised its fiscal 2008 earnings guidance on the strong showing.
The results stood out in a difficult retail environment. Women's apparel retailers have been among the hardest hit as consumers cut back on discretionary spending amid rising gas and food prices, a prolonged housing slump and tightening credit markets.
Brean Murray, Carret & Co. analyst Eric Beder said the company has found a strong formula to drive results amid weak sales.
"We believe New York & Co. has been taking the requisite steps in terms of inventories, expenses and, most importantly, discounts to register positive returns in a period of uncertainty," he wrote in a note to investors on Thursday.
Beder said that when the retail environment improves, New York & Co. will be poised for strong growth due to its improved business model.
"New York & Co. remains one of our favorite turnaround stories for 2008," he wrote.
He raised his full-year earnings estimate by 2 cents to 65 cents per share and raised his price target on the stock by $1 to $9.
Shares rose 67 cents, or 9.3 percent, to $7.85. The stock has traded between $3.65 and $13.51 during the past 52 weeks.
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