High-end consumers were in the mood for meditation rather than bling this holiday season — leaving Lululemon Athletica Inc. on the rise as Tiffany & Co. suffered a setback.
Shares of Lululemon jumped 12 percent to $59.87 and Tiffany dropped 10.5 percent to $59.94 as investors began to sort through the holiday aftermath and pick the winners and losers, a calculation that includes both performance and stockholder expectations.
Lululemon over the holiday succeeded by betting on big growth with a 77 percent year-over-year gain in inventories this fall. The yoga-inspired company said revenues have been better than expected and predicted fourth-quarter earnings would come in at 47 cents to 49 cents a diluted share, ahead of the 40 cents to 42 cents previously predicted. Comparable-store sales for the three months are slated to be up by over 20 percent on a constant-dollar basis.
“Guests have responded exceptionally well to the robust assortment and bright color palette for holiday, and momentum continues with the new spring product offerings,” said Christine Day, chief executive officer.
Tiffany, which hinted at some weakness in Europe and on the American East Coast last month, on Tuesday cut its earnings outlook for the year ending Jan. 31 to a range of $3.60 to $3.65 a diluted share — down from the $3.70 to $3.80 projected in November.
“After achieving very strong and better-than-expected sales and earnings growth in the first three quarters of 2011, sales weakened markedly in the United States and Europe during the holiday season, reflecting restrained spending by consumers for fine jewelry,” said Michael Kowalski, chairman and ceo.
Tiffany’s sales for November and December rose 7 percent versus a year earlier to $952 million, with a 4 percent gain in the Americas, a 19 percent rise in the Asia-Pacific region and a 1 percent gain in Europe. The luxe jeweler’s overall comps rose 4 percent.
Dorothy Lakner, an analyst at Caris & Co., said Tiffany might have been hurt by the woes on Wall Street and also a consumer who is simply buying things other than jewelry.
“Maybe there’s some pull away from fine jewelry to technology. Maybe people got iPads and not a blue box,” Lakner said of the company’s famed packaging. “High-end department stores were pretty universally better than expected. It’s not as if the high-end consumer said, ‘I’m not spending.’ ”
There are some small cracks emerging in the outlook for luxe, though.
Jean-Marc Bellaiche, senior partner and managing director at The Boston Consulting Group, said overall luxury spending growth is due for a slowdown, given that consumers spent 2010 and 2011 making up for purchases deferred during the financial crisis and recession.
The consulting firm projects that global luxe spending could rise 7 percent in 2012 and 2013, down from growth of 12 percent last year. “What will remain is the structural growth, but the catch-up is finished now,” Bellaiche said.
And 2012 is already off to an inauspicious retail start with unseasonably warm weather intensifying the expected post-holiday slowdown, according to the International Council of Shopping Centers and Goldman Sachs Weekly Chain Store Sales Index. Retail sales fell 5.4 percent last week from the prior week — the largest such decline since record keeping began in 1989. Sales were 2.8 percent below the same week in 2011.
The Jones Group Inc., Signet Jewelers Ltd. and Zale Corp. also offered updates of their businesses.
Jones pulled back its 2011 revenue estimates to $3.79 billion from the range of $3.8 billion to $3.87 billion previously expected. Revenues for 2012 are slated to come in at $3.8 billion to $4 billion.
“We are focused on streamlining and finding efficiencies while continuing to invest in the right places for growth,” said ceo Wesley Card. “We are planning very cautiously and tightly controlling inventory purchases and expenses until we see signs of healthy retail sales growth and a less promotional environment.”
Signet Jewelers said its comps for the final two months of the year rose 7.8 percent, and Zale’s comps for the two months rose 5.9 percent.
Shares of Jones rose 2.6 percent to $9.33 as Signet slipped 6.3 percent to $44.05, Zale fell 9.3 percent to $3.02.
And Liz Claiborne Inc., which is renaming itself Fifth & Pacific Cos. Inc., saw its stock drop 13 percent to $8.64 after the company said late Monday that lower-than-planned gross margins at Juicy Couture would hold it to the low end of its 2011 projections.
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