Shares in Pacific Brands have surged after the Bonds clothing and Sheridan bedding owner cheered investors with a surprise earnings upgrade.
Pacific Brands, which has endured several turbulent years, lifted its full year earnings guidance thanks to cost cutting efforts and solid sales growth from its core brands.
The company now expects its full year earnings to be between $63 million and $65 million for the 2014/15 year, which is up from its previous guidance of $57.4-$63 million.
Sales were up by around 5.3 per cent for the 12 months to June 30, thanks to the strength of its Bonds and Sheridan brands which make up almost two thirds of the company's business.
Pacific Brands said the improved earnings result was boosted by efforts to protect profit margins and keep down costs.
Shares in the company were eight cents, or 24.6 per cent, higher at 40.5 cents at 1020 AEST on Thursday.
The stock had closed at a six-year low of 32 cents during the previous trading session.
Many brokers had expected an earnings downgrade ahead of the company's full year results announcement on August 25.
Pacific Brands said the main drivers behind the improved results were strong performances by the Bonds and Sheridan brands as well as disciplined margin management, its recent series of divestments and cost cuts.
"This has been partially offset by challenges in the discount department store channel," the company said in a statement on Thursday.
Pacific Brands made a $109 million loss in the six months to December 31, due to $138.5 million in one-off writedowns and a slide in earnings from its underwear division.
The result was an improvement on a net loss of $219 million in the previous corresponding period.
The company sold its workwear business, which makes Hard Yakka, KingGee and Stubbies, to Wesfarmers in December for $180 million.
Its famous Dunlop Volley, Clarks and Hush Puppies shoe brands were also sold, to private equity firm Anchorage Capital Partners.
* The reporter owns shares in Pacific Brands.
