Good news from girls' apparel retailer Too (NYSE:TOO) sent the company's shares up nearly 7% in yesterday's session, as the former Limited Brands (NYSE:LTD) spinoff turned in solid fiscal first-quarter (ended May 1) numbers.
Too grew both revenues and profits, including a 2% boost in comparable-store sales that was a far cry better than last year's 18% dropoff. (Some of that improvement was attributed to a later Easter this year, which pushed some business into the first quarter.) Earnings per share (EPS) rose despite a somewhat higher share count. And margins improved across the board. Gross, operating, and net margins all came in better than their year-ago counterparts.
Numbers like these paint a picture of a retailer that seems to have all its ducks arranged neatly in a row, but it hasn't always been so easy for Too. A look at its chart since the company went public in 1999 confirms this: It's beaten the S&P 500 over its public lifespan, but the road has been rocky. Selling branded clothing to the company's target market -- seven-to-14-year-olds who are generally just starting to do (or try to do) their own shopping -- is hardly a slam dunk.
Just ask parents, who'd likely rather just pull something off the racks at Target (NYSE:TGT). Just look at financial results, which show the company's sales and profits dipping significantly during the last full fiscal year after several years of growth.
But some relatively easy comparisons caused by its downbeat 2003 can't hurt as it tries to restart growth. The company is projecting substantial EPS growth in the second quarter. Alyce Lomax, meanwhile, likes the thinking behind its new Justice discount store brand. It could be that Too is getting things right again.
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Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
