Updated from 10:34 a.m. with additional details
Tiffany (TIF) may have surprised Wall Street with its third-quarter earnings, but by no means has it gotten beyond several huge challenges that have been weighing on its performance.
The high-end jeweler reported Tuesday that third-quarter net sales rose 1% year over year to $949 million, ahead of analysts' forecasts for $922.6 million. Propped up by a combination of stock repurchases and lower costs for gold and other metals, Tiffany's earnings came in at 76 cents a share, outpacing Wall Street forecasts of 68 cents.
The company surprisingly maintained its full-year sales and earnings outlooks despite global economic challenges weighing on demand for pricey jewelry and post-election Donald Trump related protests spilling out front of its iconic store on Fifth Avenue in New York. Tiffany sees worldwide sales falling by a low-single digit percentage, while are earnings are expected to decline by a mid-single digit percentage.
Shares of Tiffany were up 4.66% to $81.78 in mid-morning trading.
Investors, however, shouldn't be fooled into believing that Tiffany is out of hot water.
In the Americas division, same-store sales dropped 2%, excluding the impact of the strong U.S. dollar. As in prior quarters, the strong dollar continues to impact tourist spending in major U.S. markets, such as New York City, where Tiffany has prominent stores on Fifth Avenue and Wall Street. The tepid traffic trend may become worse this holiday season due to the U.S. dollar's rally following Election Day. Spending by U.S.-based consumers continues to be weak, too.