Tiffany & Co. reported a 19 percent jump in first-quarter earnings, buoyed by strength in the Asia-Pacific and in Europe, which offset weakness in the U.S.
This story first appeared in the June 2, 2008 issue of WWD. Subscribe Today.
For the three months ended April 30, earnings reached $64.4 million, or 50 cents a diluted share, from $54.1 million, or 39 cents, in last year’s quarter. The results were 25 percent above analysts’ expectations of earnings of 40 cents a share.
Total sales rose 12.2 percent to $668.1 million from $595.7 million, while same-store sales grew 3 percent.
Sales in the Americas region, which includes North and South America, rose 6 percent to $373.6 million, while comparable-store sales remained constant. Boosted by tourists taking advantage of the weak dollar against foreign currencies, the New York flagship saw a 16 percent increase in same-store sales.
In the Asia-Pacific region, which includes Japan and Asia-Pacific countries outside Japan and the Middle East, sales soared 21 percent to $222 million, while comps increased 4 percent. European sales rose 38 percent to $60.1 million and comps spiked 12 percent.
“While we have always said that Tiffany’s business is not recession-proof, the increasingly global nature of our business is demonstrating the mitigating effect that it can have on an economic weakness in one particular region,” said Mark Aaron, vice president of investor relations, in a call to Wall Street.
Michael J. Kowalski, chairman and chief executive officer, said the company is pursuing expansion opportunities this year and plans to open about 24 stores across the U.S., Asia-Pacific and Europe. The company also will introduce a new smaller store format in the U.S. later this year. Tiffany operated 192 units at the end of the first quarter.
Looking forward, Tiffany remains cautious and does not expect improvement in U.S. sales until later this year. The company said it remains on track to achieve full-year expectations, and raised full-year earnings guidance in the range of $2.80 to $2.90 a diluted share, from previous guidance of $2.75 to $2.85 a share. Sales are expected to be up 10 percent.
Shares of the company increased 2.7 percent to close at $49.03 on Friday.