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. (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. (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 (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. (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. (See “Four Companies with Earnings Growth That Shines.”)
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.