NEW YORK ( TheStreet) -- Retail stocks are rallying as the sector gears up for earnings reports from major players starting this week. The sector followed the broader market, which is on a three-day winning streak.

Wall Street is banking on upside to earnings results, after retailers reported solid April same-store sales numbers. The SP Retail Index increased 1.2% to close at 545.59 on Tuesday.

So far, there were impressive results out The Pantry and Fossil on Tuesday, both stocks leading the sector higher.

The Pantry ( PTRY) reported a smaller-than-expected loss in its second quarter, sending shares surging 13.5% to $18.21. The convenience store operator lost $269,000, or 1 cent, compared with a loss of $166.1 million, or $7.44 a share. Excluding charges, Pantry actually earned a penny.

Revenue rose 13% to $1.9 million, driven by a 16% increase in gasoline sales. Analysts were calling for a loss of 25 cents a share on revenue of $1.92 million.

Fossil ( FOSL) reported a 55% spike in first-quarter earnings, led by revenue growth in Asia.

During the quarter the apparel and accessories maker earned $55.8 million, or 86 cents a share, handily topping estimates of 66 cents. Revenue jumped more than 36% to nearly $537 million.

Looking ahead, Fossil expected second-quarter earnings in the range of 70 cents to 73 cents a share, and full-year profit between $4.44 and $4.54 a share. Analysts are calling for earnings of 76 cents and $4.35 a share, respectively.

Shares of Fossil advanced 12.7% to close at $105.97.

Other notable gainers included Zale ( ZLC), which spiked 12.6% to $3.66, Wet Seal ( WTSLA), which swelled 8.6% to $4.91 and New York & Company ( NWY), which rose 7% to $5.99.

--Written by Jeanine Poggi in New York.

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