NEW YORK – The Sports Authority Inc. on Friday raised its quarterly earnings forecast as November and December sales came in less weak than expected, and the sporting goods retailer's shares rose to their highest level in 2 1/2 years.
The stock was the top percentage gainer on the New York Stock Exchange, rising as much as 14.5 percent in morning trade.
The Fort Lauderdale, Florida, company, which has been dogged by losses in the last three years, said it expects earnings from continuing operations for the fourth quarter ending on Feb. 2 to exceed its previous forecast of 35 cents to 39 cents a share. Analysts' estimates range from 37 cents to 38 cents, according to research firm Thomson Financial/First Call.
The Sports Authority also said it also expects earnings in the next fiscal year to hit the higher end of Wall Street estimates. According to First Call, analysts' forecasts range from 40 cents to 50 cents a share, for an average of 43 cents.
``It appears that the turnaround is in place and from that, the stock should move higher,'' Stephens Inc. analyst Rick Nelson said.
Sports Authority said sales in November and December at stores open at least 12 months fell 0.3 percent from a year earlier, compared with initial expectations for a percentage drop in the low single digits.
Nelson, who had forecast a 2 percent decline, said the company appeared to benefit from business from shoppers seeking holiday gifts.
Sports Authority, which operates 198 stores in 32 states, sells footwear, apparel and sporting accessories like wrist watches.
The company said it expects same-store sales in the next fiscal year to grow in the low single digits.
For the coming year, it plans capital expenditures of about $35 million, which consist of at least 33 store remodeling projects, at least three new stores and a logistics systems overhaul.
Shares of Sports Authority were up 59 cents, or 10.7 percent, at $6.09 after rising earlier in the session to $6.30, their highest level since May 1999.