Putting the bear in Vermont Teddy Bear
Yet it's hard to feel sorry for investors, given that the stock is still up about 50% since bottoming out back in October. The report wasn't pretty. While sales were up by 20%, margins contracted so viciously that earnings per share fell from $0.07 to $0.04 for the quarter.
Granted, Vermont Teddy Bear is growing its product lines, and that is a capital-intensive pursuit. It's not just decked-out bears that the company is moving these days. It also has the other usual suspects in the gifting process covered, like flowers, gourmet eats, and its clever Pajama Gram offering.
All of these moves make sense. Flowers? It's a niche so vital that even when Martha Stewart Living Omnimedia
That's why it's important to keep an eye on the company's expenses. They should come down as a percentage of sales over the next few quarters, just as sales should continue to inch higher.
This goes above and beyond the flak that the company is receiving lately for selling its Crazy for You bears, dressed in straitjackets and sporting commitment papers. You could see why mental-health groups were not pleased. Cashing in on the notoriety, the company said it would discontinue the bears only after its existing batch was sold off. They sold out quickly, helping spur a 29% sales spurt for the first 13 days of this month. On eBay
Vermont Teddy Bear's got all of the attention it needs right now. It had just better learn how to keep its expenses in check. That's one kind of stuffing that teddy bear-investing buffs don't like to see.
Can you bear to read some more related Foolishness?
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Longtime Fool contributor Rick Munarriz wants to know if there is any state cooler than Vermont, which has given us teddy bears and Ben & Jerry's ice cream. He does not own shares in any of the companies mentioned in this story. 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.