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What: Shares of Tuesday Morning (NASDAQ:TUES) were looking brighter today, climbing as much as 23% after reporting fourth-quarter earnings and announcing a new CEO.
So what: The closeout home products retailer said it lost $0.37 per share, as its performance was affected by closing down its website. Without one-time charges, the loss totaled $0.13 a share, which was still significantly worse than expectations of break even, as the company blamed increasing markdowns for the loss. Sales edged up 2.9%, to $202.1 million, while same-store sales increased by a respectable 4.6%, on a 6.2% increase traffic, the more important of the two components driving comparable sales. The company also named former Target executive and Interim CEO Michael Rouleau as permanent chief executive. In the report, Rouleau noted positive steps the company has taken including cleaning up stores, and reducing the level of clearance merchandise.
Now what: Tuesday Morning shares steadily gained over the course of the day after opening down, as investors seemed to buy into Rouleau's turnaround strategy. On the call, he noted consumers' positive perception of the company, strong supplier relationships, and a solid balance sheet. Shares of the retailer have nearly tripled in the last year, and have come up 75% since Rouleau was tapped to lead the company in March. Investors seem to approve of his approach, and same-store sales are solid, which should bode well for a comeback. Still, I'd like to see profits before getting invested.
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