Tiffany & Co.’s New York flagship drove up the company’s sales in the Americas as a new mix of tourists showed up to spend.
During the fourth quarter — when earnings were reduced by the firm’s $473 million arbitration award to The Swatch Group Ltd. and even adjusted earnings fell short of analysts’ estimates — the company registered a 7 percent increase in comparable-store sales in the Americas and “sales growth in the New York flagship store [that outpaced] modest growth in brand stores,” said Mark Aaron, vice president of investor relations.
The New York flagship accounted for 8 percent of the company’s worldwide sales last year, or about $322.5 million. Sales to foreign tourists at the flagship gained, accounting for about 45 percent of those revenues, or more than $175 million.
“The increased spending came from Chinese visitors as well as higher spending by European visitors, while a decline in Japanese tourist spending in New York and other markets too very likely reflected the yen’s weakness,” Aaron said.
The yen has contracted about 8.5 percent against the U.S. dollar in the past year.
Aaron added that tourist spending is expected to remain a substantial portion of sales throughout the Americas region “as we generate greater brand awareness in Asia, Europe and elsewhere that also fosters greater spending when customers travel.”
He called comps in other parts of the Americas, including Canada, Mexico and Brazil, “modest” and listed the three highest volume stores outside of the flagship as the units in South Coast Plaza in Costa Mesa, Calif.; Union Square in San Francisco, and on Michigan Avenue in Chicago.
In the fourth quarter ended Jan. 31, Tiffany logged a net loss of $103.6 million, or 81 cents a diluted share, versus net income of $179.6 million, or $1.40, in the 2012 quarter. Eliminating the effect of the arbitration award, EPS totaled $1.47, 5 cents below the consensus estimate, and net income was 5.6 percent higher than in the year-ago period.
Revenues were up 5.1 percent to $1.3 billion from $1.24 billion with comps for the period ahead 2 percent and, at constant exchange, up 6 percent. Excluding the effects of currency fluctuation, comps were up in all regions. However, on the basis of local currency, they were down 11 percent in Japan, where adjustments for the weaker yen elevated the result to an 8 percent increase.
Gross margin expanded to 60.5 percent of revenues in the quarter, from 59.1 percent a year ago, and rose to 58.1 percent, from 57 percent, in the full year.
“In both periods, we benefited from price increases we took earlier in the year to catch up with costs after avoiding any meaningful price increases in 2012,” said James Fernandez, chief operating officer and chief financial officer. “In addition, we benefited from diminishing pressure and/or actual reductions in product costs.”
In guidance for 2014, the company projected EPS of between $4.05 and $4.15, below Wall Street’s estimates for a $4.28 result. Like other analysts, Jefferies’ Randal Konik described the guidance as “light, though likely conservative.”
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews