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Booming High-End Retail, Slumping Low-End: StockTwits

NEW YORK (TheStreet) -- Betting on the rich is working for retail stock traders this earnings season. Banking on budget stores, however, has proved a relatively bad idea.

$TIF just raised it FY guidance on earnings and revenue. Luxury market is still performing 3x-over generic retailers. Shares up 7%.

? Pierce Crosby (@CrosbyVenture) May. 21 at 08:15 AM

Perhaps no two retailers illustrate this point more than Tiffany's (TIF - Get Report) and Target (TGT - Get Report). Both stores were among the top-trending tickers on Wednesday morning after reporting first quarter earnings before the bell.

Tiffany's earnings were as flawless as an ideal-cut diamond. The luxury jewelry retailer reported 97 cents in earnings per share on $1.01 billion in sales, well surpassing analyst consensus estimates for 78 cents in EPS on $955.05 million in revenue. Tiffany's also raised full year EPS guidance to between $4.15 and $4.25 from a prior forecast of $4.05 and $4.15.

Tiffany's earnings report was packed with justifications for management's bullishness. Tiffany reported sales growth acceleration. Excluding the impact of foreign exchange, sales increased 15% in the quarter from the same period a year ago, according to the report. Comparable-store sales jumped 11%. For comparison's sake, Tiffany's saw 10% sales growth in the fourth quarter, compared to the prior year, excluding the impact of currency exchange rates.

Japanese customers in particular couldn't wait to buy something in a little blue box. Sales in Japan climbed a currency-neutral 29% to $174 million. Same-store sales rose 30%.

Strength at Cartier & Tiffany shows growth opp for branded jewellery in mostly unbranded market is among best in #luxe. $TIF

? Rahul Sharma (@retail_guru) May. 21 at 07:19 AM

Tiffany shares opened 9% higher. Excluding today, the stock is up 2% in the past month.

Target's earnings, on the other hand, disappointed. The budget-friendly retailer reported 70 cents in EPS on $17.05 billion in revenue. Those numbers missed consensus EPS predictions by a penny, but edged past sales estimates, according to stats on the Analyst Ratings Network. Same-store sales fell 0.3%.

$TGT is going all $JCP on us. Set the bar low enough and anyone can succeed. Reports 16% drop in Q1 profit.

? Anne (@abubnic) May. 21 at 08:55 AM

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