SAN FRANCISCO (AP) ¿ Shares of Bare Escentuals Inc. jumped to a new year high Friday, a day after the mineral cosmetics company reported higher sales pushed earnings beyond analyst estimates in the third quarter.
Analysts sensed a spending recovery and the stock rose $1.11, or 8.9 percent, to $13.60 in midday trading. The stock earlier hit $14.54, eclipsing a 52-week high of $14.06 set earlier this month.
The company said Thursday its third-quarter profit fell by about 1 percent to 24 cents per share as revenue grew 4 percent. Analysts polled by Thomson Reuters expected profit of 21 cents per share.
RBC Capital Markets analyst Jason Gere said the performance "gives us more confidence that the worst is finally behind us and we are hopeful to see better trends ensue beginning with this holiday season."Gere said some concerns remain as the company is likely to spend more on operating costs but he believes per-share profit growth of 10 percent in 2010 "seems achievable." Stifel Nicolaus & Co. analyst Mark Astrachan said sales in the third quarter were boosted by new product launches, inventory restocking at retailers and organic growth. "Going forward, we believe the company remains well positioned to continue gaining share of the U.S. cosmetics market as consumers generally regard the product portfolio favorably compared to other mineral-based product offerings," Astrachan told investors in a research report.