Get Crafty With Jo-Ann Stores

Editor's note: This column was submitted by Stockpickr member Susanne Owen, also known as the Trading Nymph.

I have a retail play that's had a more than 70% stock price increase since March and a 1,100% earnings surprise since it last reported -- yet no one ever mentions it.

Now that I have your attention, you probably want to know the name and why it is so good. Well, the name is Jo-Ann Stores(JAS Quote - Cramer on JAS - Stock Picks), and it sells fabric.

Fabric? Yes, fabric, along with sewing notions, quilting supplies, craft textiles and those Wilton cake pans so you can make a Winnie the Pooh cake to celebrate your profits in the stock. You mean you don't celebrate profits with Winnie the Pooh Cake? Well, if you own Jo-Ann Stores, you might start.

In Jo-Ann's fourth-quarter conference call in March, management spoke about how the company historically has done better during recessions. Stated CEO Darrell Webb: "We also expect to be insulated from a downturn to a certain extent by the strong demographics of our shoppers and the steady performance of the sewing and craft industry in previous recessions. Nonetheless, we have planned the year conservatively from a financial perspective."

Webb went on to explain that, based on performance reports, in the two most-recent recession years -- 2001 and 1999 -- retailers in the craft and sewing business had better same-store sales increases than in the prior and following years.

In its first-quarter earnings report on May 28, Jo-Ann was off to a strong start, with a 4.5% same-store sales increase -- the fifth consecutive quarter of positive same-store sales. The street was looking for EPS of 1 cent, and Jo-Anne surprised with 12 cents.

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