Most Recent Articles In Financial
Latest Financial Articles
- Update: U.S. Stocks Close Week With Soft Landing
- Market Volatility Erodes Consumer Confidence
- Update: U.S. Markets Drag at Open, Europe Edges Down, Shanghai Recovers
More Articles By
Shares of Tiffany & Co. rose 4 percent to $79.22 Tuesday as the New York-based retailer topped Wall Street’s first-quarter earnings and sales projections.
This story first appeared in the May 29, 2013 issue of WWD. Subscribe Today.
Although robust global sales, which were anchored by strength in its Asia-Pacific region, propped up the luxe jeweler’s financials, the company maintained a cautious stance, citing economic instability in the Americas and a weaker Japanese yen.
For the period ended April 30, Tiffany registered a 2.5 percent gain in net income to $83.6 million, or 65 cents a diluted share. This compared with year-ago income of $81.5 million, or 64 cents a share. Stripping out costs tied to staff and occupancy cuts, earnings totaled 70 cents a share.
Quarterly net sales expanded 9.3 percent to $895.5 million from sales of $819.2 million, a year earlier.
Wall Street projected earnings per share of 52 cents on sales of $855.1 million.
“While first-quarter sales and earnings exceeded our expectations, we are maintaining our earnings forecast for the full year, mindful of continuing soft sales results in the Americas and the negative translation effect of a weaker yen,” said Michael Kowalski, chairman and chief executive officer.
The ceo said the retailer is continuing with various initiatives this year, including its Great Gatsby and Ziegfeld lines, the Harmony engagement ring and an updating of its Atlas collection. Tiffany plans to add a net 14 stores this year and also will launch its redesigned Web site.
Sales in the Americas expanded 6 percent to $408 million, which according to Tiffany chief financial officer Pat McGuiness was “below” the company’s expectations.
On the company call, McGuiness said the 6 percent sales growth was “entirely due to an increase in average price,” adding that “unit growth in the higher priced statement and fine jewelry was offset by unit declines at more moderate price points categories.”
The company noted it would no longer quantify the performance of its New York flagship since it represents only 8 percent of its worldwide sales.
During the quarter, sales in the Asia-Pacific region jumped 15 percent to $223 million. In Japan, sales edged up 2 percent to $145 million despite the softening yen. Tiffany spokesman Mark Aaron attributed the gain to the fact that the company unveiled impending price increases on April 10, which “spurred purchasing in advance of the increase.”
In Europe, sales increased 6 percent to $93 million, while other sales tripled to $27 million, primarily due to the conversion in July 2012 of five Tiffany doors in the United Arab Emirates to company-run stores.
Tiffany reiterated its fiscal 2013 guidance of EPS between $3.43 and $3.53, which was in range with analysts’ expectations of $3.48 a share.
“We’re encouraged with the start of the year but caution you to not draw overly optimistic conclusions from the first quarter, which generates a relatively small percentage of sales and earnings in comparison with annual results,” Aaron told analysts and investors.
The company said it expects second-quarter EPS to be “on par” with last year’s earnings of 72 cents. Analysts are looking for 79 cents a share.