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) and Target (TGT). Both stores were among the top-trending tickers on StockTwits.com 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%.