Shares of Hudson Ltd. (NYSE: HUD) were moving higher today after the travel retailer posted strong second-quarter results. As of 12:54 p.m. EDT, the stock was up 10.1%.
Hudson, the owner of Hudson News and the operator of over 1,000 stores in airports, train stations, bus terminals, and other travel-based properties, said revenue increased 7.4% to $499.4 million, on a comparable-sales increase of 4.5%, which essentially matched estimates of $499.8 million. Gross margin expanded 170 basis points to 63.9%, due to initiatives like expanding grab-and-go food offerings. That and a reduction in franchise fees, which lowered general and administrative expenses by 23%, helped drive adjusted earnings per share from $0.13 a year ago to $0.28, which topped expectations of $0.23.
CEO Joe DiDomizio said, "We had a strong second quarter performance in which we continued to drive organic sales growth and margin expansion." Domizio also noted the recent expansion of the company's contract with Boston's Logan Airport, and was optimistic about further growth: "Looking ahead, we have an exciting opportunity to continue to win new contracts and extend existing relationships, capitalizing on the uncaptured whitespace in the top airports."
Hudson did not offer guidance in its press release, but the strong margin improvement seems likely to continue for the rest of the year, as the company should benefit from lower franchise fees and efficiencies like grab-and-go food. After its initial public offering earlier this year, this was the second straight earnings beat for Hudson by a wide margin. The market could be underestimating the travel retailer's growth, especially at a time when the North American economy is strong.
10 stocks we like better than Hudson Ltd.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Hudson Ltd. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of June 4, 2018
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.