Tween Brands (NYSE:TWB) caters to girls ages 7-14, also referred to as "tweens." The company owns and operates two retail concepts -- Limited Too and Justice. Limited Too is the more mature, mall-based concept, but throws off plenty of capital with which to grow Justice, which is expanding rapidly in off-mall locations. Here's what to expect when Tween Brands reports second-quarter earnings tomorrow.

What analysts say:

  • Buy, sell, or waffle? Fifteen analysts follow Tween Brands. Nine rate the stock a buy; the rest recommend that you simply hold on to it.
  • Revenue. Analysts are projecting $212.5 million in second-quarter sales, or about 14% above last year's second-quarter sales amount.
  • Earnings. Analysts see a quarterly earnings loss of $0.15, or nearly 17% behind last year's number.

What management says:
Back when Tween Brands released first-quarter results, it projected second-quarter earnings of $0.13 to $0.16 on "flat to slightly down" same-store sales. It also offered full-year guidance, projecting diluted earnings of $2.15 to $2.25, for a 10% to 15% increase from fiscal 2006.

What management does:
Tween Brands has put together a nice string of growth. Annual sales improvements have averaged only about 8% over the past five years, but recently, top-line growth has jumped into the double digits, thanks to rapid growth at the company's Justice concept, which sells sportswear, apparel, and accessories in off-mall locations.

Margins

1/06

4/06

7/06

10/06

2/07

5/07

Gross

38.4%

38.5%

38.1%

38.3%

37.8%

37.8%

Operating

11.6%

11.8%

11.4%

11.9%

11.8%

11.5%

Net

7.2%

7.4%

7.4%

7.5%

7.3%

7.2%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.


One Fool says:
The tween category is also served by the likes of traditional department-store retailers, including Kohl's (NYSE:KSS), J.C. Penney (NYSE:JCP), and Macy's (NYSE:M). However, Tween Brands is one of the few ways for investors to gain pure exposure to the space, and an initial investment from when the company was spun off from Limited Brands (NYSE:LTD) in 1999 has more than doubled. The future looks bright as well because the Justice concept was launched so recently -- in 2004.

For more related Foolishness:

Limited Brands is a Motley Fool Income Investor recommendation. To see why dividends are not just for grown-ups, sign up today for a free 30-day trial to the market-beating newsletter.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.