(JCG) J. Crew Group Inc. – Solid 20% Growth Projection

December 15th, 2009

J. Crew Group Inc. (JCG) just hit a new 52-week high as the company’s share price climbs higher on rising estimates and steady earnings.

Company Description

J. Crew Group, Inc. operates as a high-end specialty retailer for men, woman and children in the United States. The company was incorporated in 1988 and has a market cap $2.7 billion.

J Crew has deftly navigated the challenging consumer environment of the last year, consistently exceeding analyst expectations Incorporatedluding strong third-quarter results reported on Nov 24.

Third-Quarter Results

Sales were up 14% from last year to $414.1 million. Sales at stores open for at least on year were up 8%. Earnings also came in strong at 67 cents per share, 9 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 13 cents, or 86%.

J Crew noted that it gained in a couple of key categories, with gross margin expanding to 48.4% of revenue from 41.6% last year and cash and equivalents increasing $132 million to $246.8 million.

Estimates Rising

The solid quarter sent estimate higher, with the current year adding 16 cents to $1.74. The next-year estimate stands at $2.08, a solid 20% growth projection.

Valuation

Based on the current-year estimate, JCG trades with a forward P/E of 25X, a premium to the overall market.

The Chart

Shares of JCG have been on an incredibly smooth trend higher for the last 9 months, recently hitting a new 52-week high above $45. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

Zacks Investment Research

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Read more on J. Crew Group at Wikinvest

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