TIFFANY RIDES LUXE TO 58.7% PROFIT GAIN
Byline: Thomas J. Ryan / Thomas Cunningham
NEW YORK — Everything sparkled at Tiffany & Co. in 1999.
Driven by a penchant for luxury items in the U.S. and a continuing turnaround in Japan, Tiffany’s fourth-quarter profits rose 58.7 percent and 61.8 percent for the year.
Tiffany earned $84.6 million, or $1.11 per share, in the quarter, up from $53.3 million, or 74 cents, the prior year. Tiffany said on January 6 that earnings would reach at least $1.08 a share, which beat Wall Street estimates at the time of 88 cents.
Sales rose 26.4 percent to $559.8 million. U.S. retail sales grew 27 percent to 288.6 million, international retail sales gained 27 percent to $217.7 million and direct marketing advanced 21 percent to $53.5 million.
On a conference call, Michael J. Kowalski, president and chief executive, said the results “clearly outpaced the retail industry and were far above our own growth projections.”
In the U.S., same-store sales gained 26 percent, marking seven years in a row that the company has had double-digit comp-store sales gains in the fourth quarter in the U.S. Comps grew 16 percent at the New York flagship, 21 percent in the New York region and 30 percent at branch stores overall.
Tiffany said that, driven by domestic customers, the U.S. saw both a higher number of units sold and higher average transaction size. Sales from foreign tourists grew to 14 percent of U.S. sales in 1999 from 11 percent in 1998, but remained well below their peak of 24 percent in 1990. New stores in Dallas, Los Angeles, Guam and Boca Raton, Fla., exceeded plan.
International was bolstered by a strengthening yen as well as a 13 percent comp gain in Japan, which accounts for two-thirds of international sales. Sales in the Asia Pacific region outside Japan ran up 39 percent in local currencies and, fueled by London, gained 30 percent in Europe. Tiffany added seven stores last year to close with 133, of which 38 are in the U.S.
In direct marketing, corporate sales rose 16 percent and catalog/e-commerce grew 29 percent.
For the year, earnings rose to $145.7 million, or $1.95 a share, from $90.1 million, or $1.25. Sales rose 25 percent to $1.46 billion.
At TJX, fourth-quarter earnings ticked up 0.5 percent to $136.9 million, or 44 cents, from $136.3 million, or 41 cents, a year ago. Year-ago earnings were adjusted for an accounting change for layaway sales. On a reported basis, TJX earned $126.9 million, or 39 cents, a year ago. Sales rose 9 percent to $2.52 billion from $2.32 billion on a pro-forma basis.
“We are especially pleased with our better-than-plan performance in the fourth quarter, given the exceptionally strong performance in 1998’s fourth quarter,” said Bernard Cammarata, chairman and chief executive.
At the apparel off-price division, operating income fell 3.6 percent to $230.9 million on a pro-forma basis. Sales gained 7.9 percent to $2.45 billion. TJX also operates a home goods chain.
In the year, TJX earned $521.6 million, or $1.64, against $423.8 million, or $1.27. Sales rose 11 percent to $8.8 billion.
At Bon-Ton, fourth-quarter earnings climbed 27.7 percent to $15.8 million, or $1.06 a share, beating analysts’ expectations by 9 cents. Sales climbed 8.4 percent to $250.6 million, but same-store sales fell 0.3 percent. The firm, which operates 72 stores in New England and the mid-Atlantic states, said February same-store sales inched up 0.3 percent.
Michael L. Gleim, vice chairman and chief operating officer, said in a statement that while,February sales did not meet expectations, cosmetics, shoes, men’s, home and accessories exceeded the overall average.
For the year, earnings fell 13.3 percent to $9.7 million, or 66 cents. Sales rose 5.3 percent to $711 million, with flat comparable-store sales.