What happened

Shares of Tiffany & Co. (NYSE:TIF) stock are up 5.1% as of 1:30 p.m. EST despite the company pre-announcing disappointing sales numbers for Christmas 2018. Updating investors on its sales results for the "holiday period" consisting of the first two months of Q4 2018, Tiffany said that "worldwide net sales declined 1% to $1.04 billion and comparable sales declined 2%."

So what

And yet Tiffany stock is up today despite this news. Why?

Well, there are a couple of reasons. First and probably foremost, Tiffany noted in its update that it enjoyed strong sales growth in "mainland China" (Chinese sales have been a worry of late), "solid results in Japan" (Japan is Tiffany's second-biggest market after the U.S.), and "healthy growth in global e-commerce sales" to boot.

And second, despite the disappointing holiday results, Tiffany is now pretty sure that "worldwide net sales for [full-year] fiscal 2018 will increase by 6%-7% over the prior year," while earnings will fall within Tiffany's existing guidance range of $4.65 to $4.80 for fiscal 2018. Even if the final number is "toward the lower end of" that range, it should still be enough to permit Tiffany to report "record sales and net earnings" when results come out on March 22.

Close-up of a diamond.

Tiffany's holiday results fail to sparkle, but investors take a shine to the stock anyway. Image source: Getty Images.

Now what

In a year that's been bad news for many a retailer, even this mixed bag of earnings news seems like encouragement to buy Tiffany stock -- but beware.

After all the above, Tiffany ended its update with the cautionary note that fiscal 2019 sales will probably only rise by "a low-single-digit percentage over the prior year," and profits will be up only "a mid-single-digit percentage" -- and even that is weighted toward the back half of the year.

Given that analysts are currently forecasting more than a 4% rise in sales and more than an 8% increase in earnings this year, it looks like 2019 could end up being a disappointment for Tiffany as well.

Check out the latest Tiffany & Co. earnings call transcript.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.