NEW YORK — Tiffany & Co. appears to have survived “wealth effect” fears.
Shares of Tiffany shot up 5 1/2 to 71 after the upscale retailer said it expects first-quarter earnings of at least 37 cents per diluted share, well above analysts’ estimates of 27 to 31 cents.
The stock fell 9 7/16 during Friday’s market tailspin and is still off about 20 percent since the year began.
Investors have worried that the interruption of the wealth effect — or the belief that stock-market gains lift luxury sales — would curb consumer spending. However, a Tiffany spokesman said that “business has been consistently strong in the U.S.,” with the Fifth Avenue flagship packed this past Saturday.
Tiffany said said first-quarter sales trends, so far, have been above analysts’ expectations, due to strong comparable-store sales growth in the United States as well as continued growth in most international markets. As a result of the sales growth and improved margins, the company said it now expects first-quarter sales to grow at least 25 percent.
Tiffany earned 22 cents in the 1999 first quarter. Results for the first quarter, which ends on April 30, will be reported on May 16.