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Cost Plus Q4 profits rise over 25% to beat Street estimates

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Cost Plus (NASDAQ:CPWM) said Friday its fourth quarter earnings rose over 25 percent to beat Street estimates.

For the three months ended January 28, the home furnishings and entertaining product retailer posted net income from continued operations of $36.8 million, or $1.56 per share, up 28 percent from $28.8 million, or $1.24 per share, in the same period last year.

Total revenues for the quarter rose seven percent to $364.3 million, from $341.6 million in the year-ago period.

Analysts polled by S&P Capital IQ had expected $1.50 per share in profits, on $361.9 million in revenues.

Comparable store sales for the quarter increased 7.6 percent, on top of a 7.7 percent rise in the same quarter last year. Cost Plus said same store customer count increased 3.4 percent, while same store average ticket increased 4.1 percent.

Gross profit margins rose 120 basis points to 34.3 percent, from 33.1 percent a year ago.

Cost Plus president and CEO, Barry Feld said: "Fiscal 2011 marked another year of significant progress for Cost Plus World Market.

"Growth in revenue was driven by continued improvement in customer count and our first annual increase in the average ticket since 2007.

"Notably, we saw acceleration in same store sales growth during the second half of fiscal 2011, culminating in a 7.6% comp in the fourth quarter."

Indeed, the full year period saw net income from continued operations increase to $17.7 million, or $0.76 per share, compared to just $4.7 million, or $0.21 per share, in 2010. Total revenues in 2011 rise over five percent to $963.8 million.

"This momentum has continued into the first quarter of fiscal 2012, reinforcing management’s view that Cost Plus World Market is uniquely positioned to capture market share in a value based economy while steadily increasing bottom line profitability," Feld
continued.

"We now have two years of solid growth and profitability behind us, as well as a very promising year ahead.

"We entered 2012 debt free and remain optimistic about our growth trajectory across all channels as evidenced by our 2012 outlook.

"Our fiscal 2012 plan calls for measured investment in the business, which will be funded by cash flow from operations.

"Management will continue to tightly control expenses as we execute our initiatives to ensure top and bottom line growth."

Looking forward, Cost Plus said it expects earnings from continued operations for the 2012 year to be between $26 million and $28 million, or between $1.07 and $1.12 per share. Total revenues for 2011 are expected in the range of $1.0 billion to $1.1 billion, with same store sales rising between five and six percent.

For the current first quarter, the company estimates a net loss from continued operations between $1.6 million and $800,000, or between $0.07 loss and $0.03 loss per share.

Revenues are expected in the range of $210 million to $214 million, with same store sales rising between six and eight percent.

On the Nasdaq Exchange, shares of the Oakland, California-based company rose 13.3 percent to $18.15, as of 2:30 pm EDT. So far this year, the company's stock has gained 21.31 percent.

Quick facts: Cost Plus, Inc.

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NASDAQ:CPWM
Market: NASDAQ
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