Brean Murray Carret & Co. reiterated its Hold rating and narrowed its loss estimate on apparel retailer New York & Co. (NYSE: NWY) after the company posted stronger-than-expected quarterly results.
The brokerage estimates a loss of 5 cents a share for fiscal 2012 from a loss of 26 cents previously. Brean Murray rolled out fiscal 2013 earnings per share estimate of 25 cents.
We believe that improvements in the core business will continue throughout the year especially with the recent addition of a new executive management team (and especially in 2Q as comparisons become very easy), analyst Eric Beder of Brean Murray wrote in a note.
While we applaud management for moving in the right direction, we believe that a valuation of 40x our FY13 EPS of $0.25 on a fully taxed basis is somewhat aggressive and we will continue to remain conservative with our estimates and maintain our Hold rating, Beder said.
The company on Thursday said adjusted net income from continuing operations for the fourth quarter doubled to 13 cents a share from 6 cents in the year-ago quarter. Net income from continuing operations in the fourth quarter was 24 cents per share. Net sales rose to $303.2 million from $298.0 million in the year-ago quarter. Comparable store sales rose 1.7 percent compared with a 7.7 percent fall in the prior year fourth quarter.
Beder said the company's fourth quarter results demonstrated tremendous progress during the quarter under the leadership of CEO Gregory Scott as margins, comparable same store sales results, and inventory discipline improved.
For the first quarter, NWY expects comparable store sales to be in the positive low single-digit range, with 551 stores in operation at the end of the first quarter as compared to 579 in the prior year. It expects operating loss to narrow from $8.7 million loss in the year-ago period.
Shares of NWY gained 4.04 percent to $5.67 in after hours trading on Thursday. The stock closed at $5.45 in regular trading.