Beating the market is a breeze for Steiner Leisure
Steiner posted a profit of $0.89 a share in its latest quarter, blowing away both the $0.68 a share it earned a year ago and the $0.72 a share that Wall Street was betting on. The company was helped by a few tailwind factors, including a currency gain and a healthy reduction in shares outstanding, but Steiner still would have soundly thumped those targets on a neutral playing field.
Revenue inched just 3% higher to $144.7 million, in line with analyst expectations.
Most of Steiner's spas are on cruise ships, including 133 Steiner spas on the largest vessels in the fleets of Royal Caribbean
Steiner is actually the smooth way to ride out the cruising industry. Royal Caribbean posted earnings earlier this week -- a mixed bag of fluctuating fuel costs and demand for advance bookings. Companies like Royal Caribbean and Carnival will have their ups and downs, as they discount to attract passengers during lean times and mark up their fares when demand is high. Either way, they'll fill their boats, and that's all that really matters for Steiner.
A tight economy may slow down spending on spa treatments and offshore excursions, but sometimes passengers who get a great deal on a cabin will go ahead and spend more once they're on the ship.
The healthy quarter now prices Steiner -- a longtime Rule Breakers recommendation -- at less than eight times trailing earnings. The company isn't issuing guidance, but even if it simply treads water at this point, it's a compelling value.
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