Diamonds and Computers Keep Selling Despite Downturn

Yesterday we saw that mid-end retailer Sears (SHLD) is struggling, but today we see a completely different picture from high-end jeweler Tiffany (TIF). The low dollar is doing wonders for them as their profits rose to $64.4 million, or 50 cents per share for Q1, compared with $54.1 million, or 39 cents per share last year. This was higher than the 41 cents per share that analyst expected.

Sales rose a total of 12%, but even when you exclude the extra profits from the weaker dollar, sales were up 8%. The fastest growth came from Europe where sales were up 30%, followed by Asia-Pacific at 10%. The Americas region also grew, albeit at the slower pace of 6%, and this was mainly thanks to new stores being opened rather than same-store sales.

The increase in the US also came almost entirely from foreign tourists who found the US dollar cheap, and there are worries that sales in the US will slow down as the financial crisis gives less disposable income to Wall Streeters. Even with these problems, Tiffany raised its full-year earnings forecast to between $2.80-$2.90 from $2.75-$2.85 per share.

Another big winner today is Dell (DELL), which saw its quarterly profit soar to $784 million, or 38 cents per share, from $759 million, or 33 cents per share, last Q1. Revenue also grew 9% to $16 billion. Total product shipments grew by 22% this quarter, and laptop sales grew 43%. These numbers were better than analysts’ expectations, so much so that Merrill Lynch upgraded Dell to a buy, and its shares rose significantly as a result.