Vans, Inc. saw shares surge more than 26% for the week to close at $11.20 on Friday after the company advised investors that it is revising its first-quarter and full-year earnings estimates upward.
The improved outlook comes on the heels of a better-than-expected back-to-school performance, citing strong sell-through at retail and its own 13.7% comp store gain for the selling period.
VANS said it now expects Q1 earnings to be 15 cents to 18 cents a share above prior forecasts of 58 cents. Vans noted that 11 cents of the anticipated increase was due to a lower tax rate in the quarter.
For full year 2004, Vans raised its guidance for earnings to 47 cents to 52 cents a share from previous guidance of 36 cents to 40 cents a share.
“Strip out the taxes and at the end of the day, it's still significant,” says Jeff Van Sinderen, an analyst at Los Angeles-based brokerage B. Riley & Co. “Coming on the heels of a weak wholesale business, this is the first time we've seen some tangible improvement.”
“Even though the stock has doubled, it's still in early turnaround mode,” continued Van Sinderen, “if the wholesale business comes back Vans can deliver significantly more to the bottom line.”
