TIFFANY NET GROWS 7% IN QUARTER

Byline: Valerie Seckler

NEW YORK — Strong traffic at Tiffany’s U.S. stores spearheaded an overall comparable-store sales gain of 13 percent and boosted fourth-quarter earnings 7 percent.
Mark Aron, director of investor relations, said the New York flagship outperformed the company with a 15 percent comp-store gain, while comps at branch stores were up 11 percent.
“The growth was mostly from a sharply higher number of transactions from local customers,” he said, crediting ads that were fine-tuned to feature more product and price information.
Retail sales in all U.S. stores climbed 15 percent to $111 million in the quarter ended Jan. 31.
Amy Ryan, analyst at Prudential Securities Research, said an increase of more than 70 percent in pearl sales and strong sales of silver jewelry, diamond solitaire jewelry, crystal and silver drove the revenue gain.
Net income for the quarter rose to $19.3 million, or $1.21 per share, from $18 million, or $1.14.
Gross margin slid to 53.4 percent from 54 percent in the quarter, mostly reflecting Tiffany’s lowering of prices in Japan in mid-1994, Aron said. The decrease also stemmed from “softer-than-expected sales in Japan in the fourth quarter,” he added.
Overall sales rose 15 percent to $239.3 million from $208 million. International retail sales were up 18 percent to $95.9 million. Comps abroad were up 3 percent for quarter and year.
Direct marketing revenue advanced 8 percent to $32.4 million. Ryan said an increase of more than 20 percent in catalog sales drove the gain. Aron noted that Tiffany is expanding its corporate division direct marketing into Europe and Japan.
For 1994, Tiffany’s net income surged 30.6 percent to $29.3 million or $1.85 per share, versus $22.5 million or $1.42, excluding a charge for a business realignment in Japan.
After the charge, Tiffany had a net loss of $10.2 million, or 65 cents per share, in 1993. Sales rose 21 percent to $682.8 million from $566.5 million for the year.
International retail sales climbed 34 percent to $281.9 million, reflecting, in part, the change to reporting sales at retail instead of wholesale.
Direct marketing sales grew 6 percent to $92.7 million.
Tiffany opened five stores in 1994, including two in the U.S. and three abroad.
Aron noted Tiffany boosted productivity in its U.S. stores last year by cutting their size to 6,000 to 8,000 square feet, from the 10,000 to 15,000 square feet they averaged five years ago. He said that backroom space was eliminated in the smaller units.
Tiffany’s stock closed at 30 7/8 on the New York Stock Exchange on Tuesday, down 3/8.
— Fairchild News Service