Diamonds, Suits, Handbags. What More Could Wall Street Want?
Nov 26th 2013 11:24PM
Updated Nov 26th 2013 11:26PM
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The major indexes hardly moved today, with the Dow Jones rising just 0.26 points, or less than 0.01%, while the S&P 500 moved up by only 0.01%. Nevertheless, a number of retailers made some big moves this afternoon, even amid all the warnings, both on and off Wall Street, that this holiday shopping season is going to be a big disappointment. Perhaps those warnings won't apply to the companies that made a splash today.
It all started with high-end jeweler Tiffany reporting quarterly earnings before the opening bell this morning. The company posted a 50% increase in net earnings, amounting to $0.73 per share, well above the $0.49 Wall Street was expecting, and a 7% increase in sales, which hit $911 million -- again better than the $889 million analysts were looking for.
The bulk of the gains came from the Asia-Pacific region, as an increase in fashion jewelry and colored diamonds experienced higher-than-normal demand. Tiffany experienced a 27% increase in sales in the Asia-Pacific region, while it saw only a 4% and 7% jump in the Americas and Europe. In addition, the company revised its full-year guidance higher after the strong quarter to an earnings-per-share range of $3.65 to $3.75, up from $3.50 to $3.60 per share. Shares of Tiffany ended the day higher by 8.68%.
The positive results from the high-end retailer helped pushed shares of Coach higher by 3.3% today, even though the stock was downgraded this morning. Analysts at Standpoint Research who just about a month ago slapped a "buy" rating on the fashion accessories company told investors to now hold, with the stock of the mid-high-end handbag designer having increased by around 15% from the initial call.
And finally, the fight over who has a better suit heated up today, as Men's Wearhouse made a bid to buy out competitor for Jos. A. Bank for $55 per share. This offer comes just weeks after Jos. A. Bank offered to buy Men's Wearhouse -- a bid that was quickly turned down. It's clear that the two sides want to make a deal, but it's not so clear how much the acquisition will cost. Shares of Jos. A. Bank rose 11.25% today and closed at $56.29, $1.29 above the offer price, while investors bid Men's Wearhouse shares up 7.5% to $50.60 per share. A united company would probably be more efficient and command higher margins, but if the purchase price is too high, it doesn't make sense for either side to purse a takeover. Current investors should sit back and be happy with any price they get, but it's probably not worth the risk to throw new money at either company right now.
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The article Diamonds, Suits, Handbags. What More Could Wall Street Want? originally appeared on Fool.com.Fool contributor Matt Thalman has no position in any stocks mentioned. Check back Monday through Friday as Matt explains what causing the big market movers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513. The Motley Fool recommends and owns shares of Coach. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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