Tiffany & Co. Shines Brighter

Earnings Beat; Sales Up

Quarterly earnings per share were at $0.76, up from $0.70 in the year-ago period. The company attributed the improvement to higher gross margin and lower interest and other expenses. Net sales rose a more modest 1 percent to $949 million, although comps fell 2 percent. On a constant currency basis, net sales were unchanged.

Americas, accounting for about 44 percent of the net sales, saw sales dip 2 percent and Asia-Pacific, which fetched 26 percent of the net sales, reported 4 percent sales growth. Net sales in Europe slumped 10 percent.

Analysts, on average, estimated sales of $926.64 million.

Sales Guidance In Line

For the full year, the company expects net sales to decline by a low-single-digit percentage and earnings per share to drop by a mid-single-digit percentage. The consensus estimate calls for a 2.60 percent decline in sales to $4 billion. The company targets net cash provided by operating activities of at least $660 million for the full year, free cash flow of at least $400 million.

Shines Brightest Among Peers

Among peers, Signet Jewelers Ltd. SIG reported last week that its third-quarter earnings per share fell, although the drop was less than feared. Sales, however, missed estimates.

Blue Nile Inc NILE, which is set to go private due to its impending acquisition by Bain Capital and Bow Street, reported early November a drop in net sales and below-consensus earnings per share for the third quarter.

Luxury retailers are seeing lackluster sales trends, given that consumers are circumspect concerning the economic outlook. With Tiffany's earnings overcoming the odds, as it tapped into the potential in Asia, specifically Japan and China, it is shining the brightest at least for now.

In Pre-Market Trading

• Blue Nile closed Monday trading at $40.45.
• Signet was seeing a small bounce, apparently in a sympathy move to Tiffany, and was last trading up 0.58 percent at $92.78.
• Tiffany was surging 5.09 percent to $82.12.