David Jones climbs .....

Upmarket Australian department store chain David Jones (also known as DJs) (ASX:DJS) is performing well in early 2007. CEO Mark McInnes has forecast a 2006-07 interim profit of as much as $A70m, which would be an increase of 30%. This is an improvement on previous predictions of a rise between 8.5% and 13.5%.

For the full year, DJs predicts a profit of $A98m, after $A81.1m in 2005-06. Sales growth was better than expected across the stores' range of goods, and vindicated the approach of making affluent consumers the target demographic of DJs. Sales revenue could be as high as $A1.03 billion. Turnover was previously forecast to increase by between two per cent and four per cent. However, strong trading for the previous two months has lifted the forecast of sales growth to nearly eight per cent.

McInnes also noted that booming jobs growth and a strong stock market were driving increased consumer spending.

Unfortunately for me DJ's is overpriced and I am only looking for the undervalued shares. This is a good growth share though as PEG ratio will be under 1 if these figures do materialise.

Good Luck Investing