Harry Winston Diamond Corp.'s (HWD, HW.T) fiscal first-quarter earnings soared as the jewelry retailer recorded double-digit sales gains in both its luxury brand and mining segments.
However, shares slipped 4.4% to $11.95 after hours as earnings missed analyst expectations and as the company warned that the sovereign debt crisis in Europe and the slowdown in the growth of China's economy may affect demand for luxury jewelry and watch products in the near term. Through the close, the stock is up 17% since the start of the year.
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Harry Winston owns its namesake jewelry retailer and has a 40% stake in the Diavik diamond mine in Canada's Northwest Territories. Its mining business faces some uncertainty after partner Rio Tinto PLC (RIO, RIO.LN) said it was considering a sale of its diamond division as part of a "strategic review." Harry Winston late last year chose not to sell as much output from the Diavik mine, saying it would wait until prices were more favorable. Earlier this year, the company said its rough diamond prices had stabilized and resumed steady growth in some categories.
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Harry Winston posted mixed-bottom line results last year as its diamond mining business had struggled with less-than-lustrous selling prices, though the company said earlier this year its rough diamond prices have stabilized and resumed steady growth in some categories. Meanwhile, Harry Winston's retail segment has generally benefited from strong demand, though its luxury-goods sector posted lower sales in the fourth quarter.
In the latest period, sales rose 26% in the company's luxury brand segment, while mining revenue was up 43%. Total sales increased 34% to $192.5 million.
For the quarter ended April 30, Harry Winston posted a profit of $11.6 million, or 14 cents a share, up from $3.6 million, or 4 cents a share, a year earlier.
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