Jewelry Retailers Show Return of Luxury

Jewelry retailers are gaining, as quarterly profits exceed expectations
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(Tiffany earnings report article updated with Tiffany stock movement and analysis of both Zale and Signet company fundamentals.)

NEW YORK (

TheStreet

) -- Jewelers are proving that at least the luxury shopper appears to be gaining confidence.

Tiffany

(TIF) - Get Report

, for one, saw its first-quarter profit more than double, prompting the jeweler to up its outlook.

Tiffany now expects full-year earnings in the range of $2.55 to $2.60 a share, topping Wall Street's outlook of $2.51.

As a result, shares of Tiffany are gaining 6.7% to $46.56 in early trading.

During the quarter, Tiffany earned $64.4 million, or 50 cents a share, compared with $24.3 million, or 20 cents, in the year-ago period. Excluding items, the company actually earned 48 cents a share, still significantly higher than analysts' estimates of 37 cents.

Tiffany sales jumped 22% to $633.6 million, while same-store sales climbed 10%. In Asia, sales soared 50% and grew 26% at its Manhattan flagship store.

Still Tiffany's report wasn't all shiny. Despite strength during the quarter, the company downgraded its outlook for Europe. Tiffany now expects high-single digit percentage sales growth, compared to its previous outlook of mid-teens.

Rival

Signet

(SIG) - Get Report

also saw its first-quarter profit nearly doubled, to $52 million, or 60 cents a share, from $26.3 million, or 31 cents, last year. Analysts predicted a much smaller profit of 42 cents.

Signet revenue also jumped 6% to $810 million, while same-store sales grew 5.8%. Sales at Signet's higher-end chain Jared The Galleria of Jewelry, surged nearly 16%.

Even

Zale

(ZLC)

, which has struggled the most amid the recession, said on Wednesday that it managed to narrow its third-quarter loss as margins improved and it was boosted by a tax benefit.

During the quarter, the more moderately priced jeweler lost $12.1 million, or 38 cents a share, compared with a loss of $19.5 million, or 61 cents, in the year prior.

Excluding the tax gain, Zale actually lost a much steeper 76 cents a share, but this was still substantially better than Wall Street's forecast of 95 cents.

Zale revenue declined 5% to $359.8 million, after the company shut down its supply chain in December in an effort to preserve liquidity. Zale did, however, see more items being sold at full price.

Zale is still rallying on the report, with shares spiking 9.1% to $2.75 Thursday morning.

-- Reported by Jeanine Poggi in New York.

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