"Based on our comp-store sales performance, along with operating costs that were not reduced in proportion to the sales reduction and lower merchandise margins, the company is expecting earnings per share for the full year to be between 48 cents and 51 cents," CFO Leslie Gordon told analysts. "We are still in the closing process and we will report the final results on Feb. 23."
In terms of sales, meanwhile, the numbers released on Friday pegged Q4 sales at $188 million, a 6.1% jump from the comparable period of 2004. For the full year, 2005 sales totaled $539.4 million, an 8.4% rise compared to 2004.
But rosy projections offered up for '06 by Gordon and by chairman William Kaplan on Friday sent the company's shares up by more than 4%. Most notably, the company is projecting year-to-year sales growth in the 16% to 17% range. And while same-store sales lagged in 2005, Gordon and Kaplan predicted that they would rise "in the low single digits" this year. Their projections call for flat same-store sales in Q1, "with higher levels for the remainder of the year."
The company expects earnings per fully diluted share to be in the 71- to 76-cent range for 2006, which would represent an increase in net income in the 50% range over 2005. The forecasted net income includes the effect of accounting for stock-based compensation, the impact of which is estimated to be 8 cents a share. This new accounting requires companies to expense the fair value of employee stock options and other forms of stock-based compensation effective Jan. 1, 2006.
Company officials also announced that they intend to open between 13 and 16 new stores in 2006, with four of them in Q1. The locations were not announced.
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