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Bebe Stores rises on smaller-than-expected 2Q loss

NEW YORK (AP) -- Shares of Bebe Stores surged Friday after the women's clothing company reported a smaller-than-expected loss for its fiscal second quarter and revenue beat analysts' estimates.

The chain also said that a key sales barometer did not fall as much as it did in the first quarter.

On Thursday Bebe announced a loss of 7 cents per share on revenue of $130 million. Analysts surveyed by FactSet forecast a loss of 14 cents per share on revenue of $121.3 million.

Bebe Stores Inc. reported that sales at stores open at least a year fell 1.9 percent for the period ended Jan. 4 — which included the critical holiday selling season. This was better than the 2.8 percent decline in the figure in the first quarter.

Sales at stores open at least a year is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

"We commend management on delivering improving results in the second quarter, especially in the tough and highly promotional mall environment," Adrienne Tennant of Janney Capital Markets said in a client note.

The analyst believes that Bebe's strategic shift in merchandising is working, but remains "Neutral" because the selling environment has been so volatile for retailers.

Tennant increased Bebe's price target to $5.50 from $5.

The company's stock gained 77 cents, or 16.3 percent, to $5.50 in morning trading. It's up 18 percent over the last year.