Trump Tower security fails to stop Tiffany’s share advance

Tiffany shares were poised for their best day in more than three months after the jeweller reported better than expected third-quarter results even as the company said that security at Trump Tower on Fifth Avenue had hurt traffic at its flagship store in New York City.

The company known for its signature Tiffany blue boxes said profits climbed to $95.1m or 76 cents a share in the three months ended in October, compared with $91m or 70 cents a share in the year-ago period. That topped analysts’ estimates for earnings of 68 cents

Meanwhile, sales rose 1.2 per cent to $949.3m, ahead of analysts’ estimates for $922.6m. Revenues were up for the first time in eight quarters. Like-for-like sales declined 3.1 per cent in the third quarter, shallower than the 4.1 per cent drop that analysts were looking for.

Investors cheered the news, pushing shares 5.6 per cent higher to $82.48 and taking its gains so far this year to 7.7 per cent.

However, Tiffany’s chief executive struck a more cautious tone. “We are encouraged by some early signs of improvement in sales trends, but we clearly need more positive data over time before this can be considered an inflection point,” said Frederic Cumenal, chief executive.

In the Americas, the company’s largest market, total sales slid 2 per cent, driven by lower spending by US customers but partially offset by higher spending by tourists primarily from Japan.

Tiffany also said “recent election-related activity near the Company’s New York Flagship store”, which is adjacent to president-elect Donald Trump’s Manhattan residence and office, had affected store traffic.

The advance in Tiffany shares accompanied a rise in US stocks. By midday, the S&P 500 was up 0.3 per cent to 2,208.68, the Dow Jones Industrial Average rose 0.2 per cent to 19,127.72. Meanwhile, the Nasdaq Composite climbed 0.6 per cent to 5,402.58, hitting a fresh intraday high.

Energy was the biggest decliner on the S&P 500 following crude prices lower as investors digested the latest headlines out of Vienna where Opec members have gathered ahead of Wednesday’s meeting.

The S&P 500 energy sector declined 1.6 per cent with Transocean shares leading the decline, down 6.4 per cent to $10.67.

Elsewhere, shares in Delphi Automotive fell 4.3 per cent to $63.46 after analysts at Morgan Stanley downgraded the stock to “underweight” from “overweight” and lowered their price target to $74 from $59.

The move to downgrade the stock comes as Adam Jonas at Morgan Stanley warns that a move by carmakers, who are Delphi customers, to accelerate their electric vehicle strategy could be “adverse to growth and profitability, exacerbating negative earnings revision risk at a sensitive point in the auto cycle”.

Mr Jonas pointed to Volkswagen’s plans to build its own battery factory in Germany.

Meanwhile, shares in UnitedHealth Group climbed nearly 4 per cent to $157.69 after health insurer delivered an upbeat full-year outlook.

The Minnesota-based company said it expected to earn between $9.30 to $9.60 a share in 2017 compared with analysts’ estimates for $9.14. Revenues in the range of $197bn to $199bn exceeded Wall Street estimates for $196.9bn.

mamta.badkar@ft.com

Twitter: @mamtabadkar