PORTLAND, Ore. -- Shares of clothing retailer Quiksilver Inc. rose in trading Friday after the company reported a stronger-than-expected second quarter.
THE SPARK: Quiksilver (ZQK) reported last Thursday that its second-quarter profit surged on stronger margins and beat expectations despite its revenue falling.
THE BIG PICTURE: Like most retailers, Quiksilver has struggled as shoppers cut their discretionary spending. But investors were cheered as it managed to deliver a profit.
THE ANALYSIS: B. Riley and Co. analyst Jeff Van Sinderen said Quiksilver has improved operations across its lines, and it can probably can keep defending its market share better than smaller brands. But pinpointing the timing or magnitude of a turnaround in sales trends remains challenging.
Given that and the company's large debt, he rated its shares "Neutral."
SHARE ACTION: Shares of Quiksilver rose 27 cents, nearly 6 percent, to $4.90 in midday trading. They have traded between $1.49 and $6.09 during the past 52 weeks.