Jo-Ann Stores, Inc. (JAS) is expected to grow 30% over each of the next two years and recently topped analyst estimates.

Company Description

Jo-Ann Stores is a retailer for fabric and crafts for hobbyists. Stores stock everything for activities such as sewing, scrap booking, home decorating, and other crafts.

EPS Doubles and then some

On May 27 Jo-Ann reported first-quarter results that included wider profit margins, higher sales and a spike in earnings. Net income came in at $8.6 million, up from just $3.0 million one year ago. Earnings per share were 30 cents, almost triple the consensus of 11 cents and the 12 cents earned last year.

This was the third surprise in the past 4 quarters as net sales picked up 3.1% to $460 million for the quarter. The company’s gross margin widened 210 basis points to 48.5% on reduced product costs.

No Surprise, Estimates are Up

Following the previously mentioned release analysts quickly raised forecasts for fiscal full-year 2010 and 2011. The consensus for the current year is at $0.99m up from $0.80.

Estimates for 2011 are now averaging $1.29, up from $1.16. These projections would be year-over-year earnings growth of 31% and 30%, respectively.

The Chart

Shares of JAS have formed a nice double bottom and went on to set a higher high. Also, the MACD signal line has just crossed over. Take a look below.

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