NEW YORK — Improved costs and strong sales in China helped Tiffany & Co. earn a 16.3 percent rise in second-quarter income Tuesday.
The New York-based jeweler’s shares fell 1 percent to $80.82, even though the company raised its full-year outlook.
For the period ended July 31, net income totaled $106.8 million, or 83 cents a diluted share, compared with year-ago income of $91.8 million, or 72 cents a share.
Quarterly sales expanded 4.4 percent to $925.9 million from $886.6 million in the prior-year period.
Wall Street expected earnings per share of 74 cents on sales of $941.4 million.
Tiffany attributed the strong financial results to robust growth in Asia, specifically in Greater China, as well as growing demand for statement and fine jewelry.
Statement jewelry, which retails for more than $50,000, continued to outpace fashion jewelry in terms of sales, even though Tiffany said it has worked to improve its lower priced collections, which includes nongemstone baubles in silver, gold and Rubedo, its recently developed copper-centric alloy.
On a call with analysts Tuesday, Tiffany vice president of investor relations Mark Aaron noted the brand is focusing on new fashion jewelry collections, such as the Ziegfeld collection in silver and freshwater pearls and onyx, as well as the brand’s “reinterpretation” of its Atlas line, which will make its debut Sept. 10.
Those collections, “along with others in the product development pipeline, are intended to generate improving fashion jewelry sales trends over the next year,” Aaron said.
On the operational side, Tiffany chairman and chief executive officer Michael Kowalski credited diminishing product cost pressures to stronger quarterly results.
Indeed, quarterly gross margins improved to 57.5 percent of sales compared with year-ago margin of 56.3 percent.
“We were pleased with the results of our efforts to improve gross margin which, combined with well-controlled expenses, yielded a solid increase in operating margin,” the ceo said. “Looking forward, we are equally excited about the initiatives we are pursuing in product development, marketing communications and store expansion, all intended to further enhance Tiffany’s strong brand position and take fuller advantage of its long-term growth opportunities in the global luxury market.”
By region, sales in the Americas increased 2 percent to $444 million, as comparable-store sales remained unchanged. In the Asia-Pacific region, sales jumped 20 percent to $208 million, as comps expanded 13 percent, propped up by strength in China.
Impacted by the weaker translation of the Japanese yen, sales in Japan declined 14 percent to $136 million. But the jeweler said that on a constant-exchange-rate basis, sales rose 7 percent, as comps increased 8 percent, due partially to growth in the engagement and higher-end jewelry categories.
In Europe, business improved, thanks to strength in the U.K., giving Tiffany an 11 percent sales jump to $111 million. Comps in Europe rose 7 percent. Other sales grew 33 percent to $26 million, reflecting the conversion of five Tiffany stores in the United Arab Emirates from independently-operated to company-operated, the brand said.
For the year, Tiffany now anticipates EPS of between $3.50 and $3.60, up from its prior guidance of between $3.43 and $3.53.
Analysts are looking for earnings of $3.53 a share.
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye
Did you know: @carlychaikin of "Mr. Robot" has been painting for about a decade? The actress, who plays Darlene on the show, is a self-taught artist who lists Salvador Dalí and Chuck Close as some of her idols. Chaikin told WWD that painting is a form of meditation for her — A much-needed one given the intensity of "Mr. Robot." See a piece Chaikin is working on at WWD.com (📷: @jilliansollazzo) #wwdeye