Dress Barn, Inc. (DBRN) just hit a new 52-week high on better than expected Q2 results from early March that included an awesome 48% earnings surprise.

Second-Quarter Results

Sales for the period were up 73% from last year to $594 million. The gain was driven by the company’s November merger with Justice, but when breaking out each segment on an individual basis, the numbers still look solid.

Segment Results

Dress Barn sales were up 7% from last year to $209 million, with comparative store sales up 6%. Maurices saw sales increase 12% to $164 million, with same-store sales up 5%. And finally, same-store sales at Justice were up 19% from last year to $221 million.

Dress Barn also saw its operating income spike, coming in at $43 million, or 7.3% of sales, compared to a $2.4 million last year. The gains were driven by gross margin expansion and strong same-store sales results.

Balance Sheet

Dress Barn’s balance sheet improved from last year too, with cash and equivalents up $82 million to $253 million while long-term debt dropped almost $100 million to $25 million.

Estimates

Estimates advanced on the good quarter, with the current year adding 11 cents in the last month to $1.58 and the next year adding 4 cents to $1.97, a bullish 24% growth projection.

Valuation

DBRN still looks reasonably priced, trading with a forward P/E multiple of 17X, in line with the overall market.

The Chart

DBRN hit a new 52-week high on the good quarter. If shares do pull back, look for support at this breakout area. 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.

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