Tuesday Morning Corp. (NASDAQ: TUES) Shares Gain on Earnings

Shares of Tuesday Morning Corporation rose today on the releaseof the company's annual report earlier this morning

. Tuesday shares gained $.05, or about a quarter of a percentage point, including after hours trading, to finish at $3.71 on less than average volume.

But this editor is stuck wondering why shares barely budged, considering the numbers and highlights of the report.

Net sales for fiscal 2010 were approximately 3.3% higher than that of fiscal 2009, increasing $26.6M compared with $828.3M from the year ago period due to an increase in sales from comparable stores (stores open at least one year) of about 2.2%.

Gross profit increased approximately 6%, or $17.9M to $314M for fiscal 2010, compared with $296M for the period a year ago. Gross profit percentage increased about a full percentage point from about 37% to 38%, attributable to a decrease in markdowns.

Due to employee incentive bonuses, selling, general, and administrative costs increased slightly, only about .1% in 2010 from fiscal 2009. Not a bad price to pay for a 3.3% uptick in comparable store sales.

Consider that in fiscal 2009, net sales decreased nearly 9.5% from fiscal 2008 during one of the worst retail-battering recessions the world has seen for over 60 years. Gross profit had also declined during that time period significantly; by about 8% in fact.

Is the bounce back in retail a story exclusive to Tuesday Morning, or is there market-wide retail prosperity lying in wait just around the corner? Surely, it can't hurt that Tuesday is a luxury home goods retailer that sells products at astonishing discounts from the retail markup consumers are used to paying, and maybe therein lies the company's strength: pricing power that attracts and retains retail foot traffic.

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Tuesday Morning Corp. (NASDAQ: TUES) Shares Gain on Earnings

By: Ronald Russo

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