Tiffany & Co. and Lululemon Athletica Inc. might play in the hottest spaces in fashion — luxe jewelry for the former and athleticwear for the latter — but they took turns in very different directions over the holiday season.
Tiffany lost some traction in the Americas and saw its overall sales for the last two months of 2014 drop 1 percent to $1.02 billion, driving its stock down 14 percent to $89.01 Monday. Meanwhile, Lululemon showed some sign of getting its groove back after a series of missteps and projected a fourth-quarter comparable-store sales gain of 6 to 7 percent, boosting its shares 6.8 percent to $62.59.
That might be the holiday season in a nutshell — while the overall industry numbers were not a blockbuster, they weren’t as bad as feared and allowed enough room for companies in ascent to offer pleasant surprises while others stepped back.
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Wall Street is keeping a close eye on Tiffany.
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“We are increasingly cautious after Tiffany & Co. announced disappointing holiday sales, with comparable-store sales flat versus consensus estimates for [a] 4.4 percent [gain],” said Christian Buss, an analyst at Credit Suisse. “We believe benefits from prior tailwinds, including favorable commodity costs, outsized [Asia-Pacific] growth and strength in North America are beginning to erode.”
The tony jeweler lowered net earnings guidance for the year ending Jan. 31 to a range of $4.15 to $4.20 a diluted share, down from a previous estimate of $4.20 to $4.30 a diluted share.
Lululemon, on the other hand, raised revenue and earnings guidance for the fourth quarter ending Feb. 1. The company expects net revenue in the range of $595 million to $600 million. That’s above the prior guidance of $570 million to $585 million with a low-single-digit comp gain. Diluted earnings per share are estimated at 71 cents to 73 cents for the quarter, above the initial forecast of 65 cents to 69 cents.
Wells Fargo managing director and analyst Paul Lejuez said the brand was “coming back to life.”
“With [Lululemon’s] product, sourcing and public relations issues over the last couple years, many wondered whether the brand had permanently lost its edge,” he said. “Competition has increased and [Lululemon’s] errors did, in our view, let other players take some share. However, following the second-consecutive quarter of sales acceleration and consistent with our channel checks, we believe [Lululemon] is demonstrating that customers have not walked away from the brand.”
Lululemon was among the many brands meeting with investors at the annual ICR Xchange conference in Orlando, Fla. Among the other revelations that came out of or ahead of presentations at the conference were:
• Ascena Retail Group Inc. said comps for the nine-week holiday period were up 2 percent, with stores flat and e-commerce ahead 17 percent. Fiscal-year earnings guidance was cut to a range of 70 to 75 cents a diluted share, down from previous guidance for EPS of 90 cents to $1.
• Express Inc. raised fourth-quarter EPS guidance to 43 cents to 46 cents, up from 38 cents to 45 cents.
• New York & Co. Inc. said it expects adjusted fourth-quarter operating results to range from breakeven to a slight loss. Comps for the nine-week period ended Jan. 3, were down 0.9 percent.