Shares of Tiffany & Co. advanced more than 9 percent Wednesday after the jeweler reported better-than-expected first-quarter results lifted by a surge in spending in Japan and ongoing strength in luxury.
The firm lifted its full-year earnings guidance and said it expects gross margin improvement for the year, although not at the level of the 200 basis point improvement registered during the first quarter.
Sales in Japan were elevated by consumers rushing to make purchases prior to the April 1 increase in the country’s consumption tax and ended the quarter, which concluded on April 30, at $174 million, up 20 percent in U.S. dollars and ahead 29 percent at constant currency, eliminating the effects of a weaker yen.
On a prerecorded call, Mark Aaron, vice president of investor relations, said since the tax hike, “we’ve been experiencing sales declines, which have been recently moderating. As a result, we’re not changing our previous expectation for healthy sales growth in the full year.”
On a same-store basis and at constant currency, same-store sales in Japan rose 30 percent during the quarter, well ahead of the 10 percent gain registered in Asia-Pacific and the 8 percent increase in the Americas. Although net sales in Europe were up 9 percent in dollars, to $101 million, and ahead 2 percent at constant currency, same-store sales were down 3 percent when currency fluctuation was excluded.
“Geographically, constant currency comps in the U.K. and overall continental Europe were similarly soft, although individual performances by country within continental Europe were mixed,” Aaron said.
Net income in the quarter rose 50.3 percent to $125.6 million, or 97 cents a diluted share, from $83.6 million, or 65 cents, in the year-ago quarter and against consensus estimates for earnings per share of 78 cents.
Revenues picked up 13 percent to $1.01 billion from $895.5 million in the 2013 quarter and were up 15 percent at constant currency. The top line easily beat the consensus estimate for revenues of $955.1 million.
Revised guidance is for full-year EPS of between $4.15 and $4.25, above the previous range of $4.05 to $4.15. The consensus estimate prior to the first-quarter report was for 2014 EPS of $4.17. Gross margin grew to 58.2 percent of sales from 56.2 percent in the prior-year period.
Ralph Nicoletti, executive vice president and chief financial officer, tied the gross margin improvement to “favorable product costs, price increases taken across all product categories and regions, and meaningful sales leverage on fixed costs. And, of course, the strong sales increase in Japan had some positive effect on overall gross margin.”
Shares ended the day at $96.30, up $8.07 or 9.2 percent.
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion
“I’m Russian and I love to use all these little tricks that I got from my grandma or my mom. We didn’t have a lot of money for creams or anything like that so we would use a garden as a beauty treatment regime. We’d put cucumber in the fridge and do a cucumber mask,” says model @irinashayk on one of her beauty hacks. WWD asked celebs what their go-to self-care rituals are. See what Naomie Harris, Freida Pinto and more said on WWD.com. #wwdeye #wwdbeauty (📷: @zefashioninsider)
Exclusive: @viktorandrolf are teaming up with @Zalando on a collection made from leftover clothing. The lineup, which lands at the retailer February 1, includes 17 pieces adorned with sliced up and repurposed overstock from the retailer’s private label collection. Pictured here is a look from the collection –– see more on WWD.com. #wwdfashion #wwdnews
@duewestnyc is the newest bar joining the collection of intimate neighborhood-focused spaces in the West Village. The cocktail menu, which includes bitters and syrups made in-house, offers a “Build Your Own Old-Fashioned” – like the one pictured here – where guests can choose from a list of spirits and unexpected sugars and bitters. #wwdeye
Spotted at last night’s National Board of Review gala in NYC: Angelina Jolie. Jolie – along with Meryl Streep, @lupitanyongo and more – continued the all-black dress code from Sunday’s Golden Globes. #wwdeye (📷: @lexieblacklock)