Get Crafty With Jo-Ann Stores

For full-year guidance, Jo-Ann expects to earn between 75 cents and 85 cents per share. Yet it earned 12 cents per share during the period, compared with a loss of 7 cents per share in the year-ago period, so its guidance might be conservative considering shares are up 19 cents in the first quarter. Also, late in the year Jo-Ann should be benefiting from a new point of sales systems that it's putting in new stores. According to Webb:

"We think we're being prudent just based on what the economy looks like, and a year ago things were looking very good through the first two quarters for us, and we ended up raising guidance a little bit, and then the economy went south in the third quarter. We had to revise guidance back to our original range. We just think it's prudent to watch a little bit further into the year and see how things go."

Yet if the trend in comps continues in the 4% to 5% range in the second quarter, Jo-Ann would have to have a pretty big slowdown at the back half of the year to fall within its current guidance. And as CFO James Kerr indicated in the May conference call: "The majority of our business is done in the third and fourth quarters."

In addition, Jo-Ann's balance sheet is in a significantly better position than it's ever been in before.

On Thursday, June 12, the stock suffered a quick drop when Soleil downgraded the stock in the afternoon. Jo-Ann recovered most of the loss by Friday afternoon.

And finally, a little trivia on what are the new hot trends. Scrapping is not anymore. According to Jo-Ann Stores, it is the food-crafting business; the Wilton products continue to be very strong. So are craft textiles, which folks use to decorate their clothing. So rhinestone and those Winnie the Pooh-shaped cakes are what's hot -- and so is Jo-Ann Stores in this tough economy.

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