Jo-Ann Stores Inc. (JAS) is doing a great job of executing a turn-around strategy that has enabled the company to move back into profitability. The company’s first-quarter results, reported on May 28 were excellent. Jo-Ann also recently boosted its full-year guidance.

Jo-Ann Stores Inc. is a specialty retailer of crafts in the United States. Its products are used in sewing, crafting and home projects. The company was founded in 1943, carries a market cap. of $552 million and is headquartered in Hudson, Ohio.

First-Quarter Results

Jo-Ann reported solid first-quarter results on May 28 that demonstrate the company is executing its plan to move back into profitability.

Sales were up 5.2% from last year to $446.1 million. Same store sales were up 4.5% compared to last year. Net income was up to $3 million, a big improvement from last year’s loss of $1.7 million.Operating profit for the first quarter was $7.4 million versus $0.1 million for the prior year’s first quarter.

This produced earnings of 12 cents per share, easily exceeding analyst expectations of just one penny.

Store Adjustments

The company also announced that it was planning on opening 20 to 23 new stores in fiscal 2009, up from the previous range of 12 to 15. Jo-Ann is also planning on closing 30 stores, up from the previous 25, citing real estate as a driving factor.

Bullish Guidance

Jo-Ann provided bullish guidance while reporting its first-quarter results, boosting its earnings outlook. The company now expects full-year earnings of 75 to 80 cents per share, up from the previous range of 70 to 85 cents. The analyst community is more optimistic, projecting full-year earnings of 92 cents per share.

The Chart

Shares of JAS have had a great run in 2008, opening the year trading at $10 and advancing to current levels right around $22. This stock appears to have created a short-term bottom on July 15, with shares bouncing higher after temporarily dipping below the $20 mark. The next target is just below $25, which is also the 52-week and all-time high.

Content Courtesy: Zacks Investment Research

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