Specialty retailer Cost Plus
The fourth quarter ends January 28, but the key holiday sales are in. Cost Plus forecasts that results will be at the low end of guidance. That means same-store sales will be flat to down slightly, and earnings will come in close to $1 a share. That guidance matches analyst projections.
The news lifted the shares 5.9% Tuesday, although the stock settling back 2% on Wednesday. Why was there a big move Tuesday? Last quarter, Cost Plus and competitor Pier 1
Making investors giddy, perhaps, is that Cost Plus has been expanding. It opened an Internet store in October. It will add 25 stores this year, bringing its total store count to 267. But with same-store sales stuck in neutral (or worse), the stock hardly excites this observer.
Analysts are looking for 15% annual earnings growth for the next five years. But at 18 times trailing earnings and in a ripe competitive environment, I wouldn't call Cost Plus a bargain.
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