Giving a nod to high-end handbags, designer watches, and brand-name cosmetics, respectively, the strong reports show that consumers are starting to warm up to the expendable luxury goods that were hard to justify purchasing when the economy was sputtering.
The recovery hasn't been without its hiccups, but it's clear that shoppers are no longer willing to do without their beauty creams and designer satchels.
Michael Kors sells handbags, apparel, and other accessories. The merchandise isn't cheap. You can spend as much as $1,195 on a tote handbag. High prices apparently aren't a problem. Revenue at Michael Kors soared 70 percent to $636.8 million during the holiday quarter, fueled by an amazing 41 percent spike in comparable store sales.
Fossil saw its profitability soar 34 percent on a 14 percent increase in net sales. The Texas-based maker of stylish timepieces and other accessories has come through with 19 consecutive quarters of positive comparable store sales.
Avon didn't hold up as well as Michael Kors and Fossil, generating flat year-over-year sales growth. However, the $0.37 a share in adjusted earnings from continuing operations blew past the $0.27 a share that analysts were targeting.
Combine all three well-received reports, and it's clear that vanity is back in fashion.
This week's strong reports come as a welcome contrast to last month's report out of luxury bellwether Coach (COH). The company that's famous for its high-end handbags fell sharply after posting uninspiring quarterly results.
Investors now know that Coach's shortcomings were company-specific: It was just Coach getting coached. There is clearly an appetite for luxury items that make shoppers feel more confident in their appearance.
"Economic ups and downs have an irrefutable impact on Americans' spending habits that extends well beyond gas and groceries and over the past five years many consumers have had to rein in spending as fiscal woes plagued budgets," STORES Editor Susan Reda concludes. "The most recent findings suggest that consumers are loosening the grip they've had on their wallets -- though admittedly just slightly."
Well, if Tuesday's strong showing out of three distinct purveyors of luxury and beauty products have any say in the matter, consumers are now dramatically loosening up on that grip.
The current quarter will be even more important, especially after the end of the two-year payroll tax stimulus has lightened take-home pay. However, with Michael Kors raising its guidance and Fossil targeting double-digit growth in net sales to continue through 2013, the outlook for luxury goods retailers hasn't been this uplifting in years.
Motley Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Coach and Fossil. The Motley Fool owns shares of Coach and Fossil. Try any of our newsletter services free for 30 days.