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.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)