Shares of Dress Barn Inc skyrocketed nearly 20% Wednesday (29 November) after the women's specialty retailer reporting sharply higher first-quarter earnings that surpassed analysts' expectations and lifted its forward guidance.

Net income for the three months ended 28 October came in at US$27.4m or 40 cents a diluted share, 34.6% higher than a year ago and 3 cents above analysts' estimates. Year-ago profits were $20.4m or 32 cents.

Sales were up 12.4% to $358.4m from $318.9m and advanced 7% on a same-store basis as increases of 2% at its Maurices stores, acquired last year, were more than offset by a 10% pickup at Dress Barn stores.

More significantly to investors, the Suffern, NY-based specialty store operator lifted its full-year earnings guidance to a range of $1.30 to $1.35 a share, 5 cents above previous estimates, on the assumption of same-store sales gains of 4% for the rest of the year.

Wall Street reacted quickly to the news, released after the market closed on Tuesday, and sent shares leaping $3.96, or 19.3%, to close at $24.46 in Wednesday's Nasdaq trading session.

David Jaffe, president and chief executive officer, pointed out that this was the 11th consecutive quarter of higher same-store sales.

"Our business continues to show strong momentum despite increasingly difficult comparisons," he said. "Our fall assortments have shown excellent initial sell-throughs and contributed favourably to our margins."

Dress Barn has 810 Dressbarn stores in 45 states and 561 Maurices stores in 41 states.

By Arnold J Karr.