Market darling Pumpkin Patch's latest achievement - more than tripling its profit to $24.6 million on Tuesday - has adoring investors clucking over the stock as it toddles higher again.
That wasn't the case for the childrenswear company's shares earlier in the week.
With a strong run up to the
results, well predicted by analysts but underplayed in the company's own $23 million guidance, the share price stumbled on the day of the result. Profit-taking took it 12c lower to finish the day at $3.18.
It was only a momentary dip for a stock which has risen about 22 per cent off a six-month low in early May and is heading back towards the $3.45 six-month high.
As a high-growth company with a high price-to-equity ratio, the shares tended to exaggerate movements in the wider market, brokers said.
When the market was going down in March and April - on concerns company earnings would be held back by rising interest rates, a higher dollar and slowing economic growth - Pumpkin Patch shares suffered.
They have since recovered with the market. Investors continue to back management over the company's international expansion - and its attempt to build Pumpkin Patch into a major brand.
In April, the company said at its half-year that it would make its first direct foray into the US market, where previously it had sold wholesale through department stores such as Nordstroms.
This week, it said it had opened one store in the US and planned three more - two in Los Angeles, one in San Francisco - as it built a profile of the market. It wants to take the same cautious approach it did to the British market, where the company increased the pace of store openings during the 2005 financial year as its confidence grew.
