BOSTON (TheStreet) -- Chaotic first-quarter results from retailers have made a few top performers present themselves as outstanding buys.
They include high-end retailers
, and at the other end of the spectrum,
, which sells its goods for, yes, $1.
Recent poor performers, which include discounter
, have cited everything from bad weather to rising operating costs and U.S. economic uncertainties for their disappointing first-quarter results.
Tiffany and Coach, on the other hand, are going gang-busters as the world's wealthy, buoyed by stock-market gains and a more stable economy from their perspective, are spending on luxury items once again.
The discount-closeout retailer Big Lots, which should thrive in the current economic environment, today cut its full-year outlook after first-quarter earnings fell due to a 3.6% decline in same-store sales, which contributed to a 1% decline in revenue. It also revised its same-store sales outlook downward for the balance of the year, saying that it expects they will be flat to down 2%.
Big Lots' shares have slumped 21% over the past three months, but included in that is a sell-off after the company reportedly turned down a private equity buyout offer last week. The company's valued at $2.4 billion.
Sears, a week ago, reported a first-quarter loss of $170 million, or $ 1.58 per share.
Share performance by the discount retailer sector is off sharply this year. The S&P General Merchandise Stores Index, made up mostly of discount retailers, was down 8.9% through May 6, versus a 6.8% gain for the S&P 1500 Index. In 2010, the sub-industry index rose 32%, twice that of the S&P 1500.
The performance of Dollar Tree, a head-on competitor of Big Lots, stands out. The company owns 4,000 discount variety stores in 48 states, which mostly offer merchandise for the fixed price of $1.
Last week, it reported a first-quarter profit of $101 million, or 82 cents a share, up from $63.6 million, or 49 cents, a year earlier. Sales climbed 14% to $1.55 billion, and were up 7.1% on a same-store basis. It also raised its performance outlook for the rest of the year.
Dollar Tree's shares are up 22% in the past three months and 46% over the past year. They hit a 52-week high of $63.96 last week. The company has a market value of $7.7 billion.
Analysts give it seven "buy" ratings, two "moderate buys" and 10 "holds," according to TheStreet Ratings.
Standard & Poor's gives it a "buy" rating and a $72 price target, a 16% premium to its current price.
S&P analysts project same-store sales growth of 4% to 5% for Dollar Tree this year after a gain of 6.3%, "as we see continuing benefits from cost-conscious consumers seeking out the best values on everyday necessities."
Tiffany is a world-renowned jewelry retailer. The company reported today that first-quarter earnings rose 26% as sales increased 20% worldwide. It posted a profit of $81.1 million, or 63 cents per share, up from $64.4 million, or 50 cents, a year earlier. Tiffany also raised its earnings outlook for the rest of the year.
In addition to more spending from its high-end customers, the company said it is seeing more buying from "aspirational" middle-income buyers of lower-priced but high-quality silver items.
Shares of the $9.7 billion company are up 15% over the past three months and 67% over 12 months.
Coach is riding on the same retail tailwinds as Tiffany, and both get "strong buy" recommendations and five-star ratings from S&P analysts.
Coach is a specialty retailer focused on a product line that includes handbags, wallets, watches, footwear and other accessories.
S&P analysts said in research note that "we see favorable long-term sales and earnings prospects for Coach as much based on management's acumen as on global brand potential."
The company is seeing booming sales in China where it plans to open 30 stores annually over the next three years. Sales in China doubled to $100 million in the company's fiscal 2010, and are projected to reach $185 million in 2011, S&P said.
Coach's shares are up 11.5% over the past three months and 57% over the past year, giving it a market value of $18.5 billion.
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