Straggling earnings reports are revealing more weather-related issues for specific industries (home improvement, for example), but several retailers have been posting really good numbers.
Tiffany & Co. (NYSE:TIF) soared on news of its fiscal first quarter producing global sales growth of a solid 13% to $1.0 billion. Bottom-line earnings grew a whopping 50% to $126 million, or $0.97 per diluted share—41% excluding one-time expenses—over the same quarter of the previous fiscal year.
Some of the surprising sales growth came from Europe, with a nine-percent comparable gain to $101 million, and from Japan, which saw sales improve 20% to $174 million.
On a constant currency basis, the Americas region produced increasing sales of nine percent and comparable store growth of eight percent to $439 million.
As a result, company management increased its earnings range for the fiscal year ending January 31, 2015 to between $4.15 and $4.25 per diluted share, up from the previous earnings range of $4.05 to $4.15 per diluted share.
The Street bid the stock nine percent, or about $8.00 a share, on the financial report.
And another higher-end retailer reported very good earnings as well, seeing its stock move nicely higher on the news.
Williams-Sonoma Inc. (NYSE:WSM) raised its full-year fiscal 2014 earnings forecast after producing first-quarter net revenue growth of 9.7% to $974 million.
The company is having very good success growing its direct-to-consumer business, which improved 17% in the first quarter, representing half of all revenues.
The company’s operating margin grew during the latest quarter, and diluted earnings per share grew 20% to $0.48, or $46.2 million in total.
These are solid numbers from two important brands. Tiffany & Co. is an expensive stock, but it’s always expensive and has been doing very well on the stock market since 2005.
Some other retailers are having a difficult time. Target Corporation (NYSE:TGT) can’t seem to get out of its stock market downtrend, and there’s more to the story than just the data breach.
And The TJX Companies, Inc. (NYSE:TJX), which was a stock market darling up until the beginning of this year, just had an earnings miss and lowered its fiscal-year earnings expectations.
So the ebb and flow in retailing is like the stock market itself: choppy, mostly trendless, and fraught with risk.
But if you’re looking for both operational and stock market momentum, then it’s clearly with Tiffany & Co. Management is building up the company’s inventory (currently running six percent above last year’s) in anticipation of further sales growth.
The company started a new $300-million share repurchase program in March of this year, but that really isn’t a lot for a highly liquid $12.0-billion company.
Stocks are just all over the place, like earnings, and there’s no reason to expect this action to change. But increased spending at higher-end retailers is a positive consumer trend, and Tiffany & Co. is poised for more capital gains this year.
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