Tiffany & Co.’s fiscal third-quarter earnings edged down 1% as lower costs nearly offset sales drops. The upscale tiffany enjoyed strong sales in Europe and most of Asia.
Tiffany boosted its earning view for the year, saying November is off to a good start and it is hopeful about sales through the rest of the holiday season.
Results improved in many product categories during the third quarter, especially later in the period, investor-relations chief Mark Aaron said in a conference call.
The change largely reflected easier comparisons to last year’s weak sales, “but we think may also reflect some improvement in underlying demand in some markets,” Mr. Aaron said. Tiffany sales are most soft in its highest-priced products.
The Asia-Pacific region, except for Japan, where demand is still weak, and Europe achieved better-than-expected sales. Those overseas results, combined with ongoing expense restraints, contributed to profit above Tiffany’s prior forecast.
Sales in the Americas dropped 9%, with U.S. sales at stores open at least a year down 10% and off 8% at its New York flagship store. The declines were less sharp than experienced earlier this year.
In Europe, sales rose 16% excluding foreign-exchange effects, with same-store sales up 9%. In the Asia-Pacific region, same-store sales declined 3%, with weak sales in Japan offsetting strength elsewhere in the region.
For the quarter ended Oct. 31, Tiffany posted a profit of $43.3 million, or 35 cents a share, from $43.8 million, or 35 cents a share, a year earlier. Earnings from continuing operations fell to 34 cents from 36 cents. Revenue decreased 2.9% to $598.2 million. Excluding currency changes, sales fell 5% and same-store sales tiffany bracelets 6%.
Analysts surveyed by Thomson Reuters had forecast a profit of 24 cents a share on $575 million in revenue.
For the fourth quarter, Tiffany anticipates a mid-single-digit percentage increase in sales. Analysts’ mean estimate calls for 6% growth to $892 million, according to a survey of analysts by Thomson Reuters.
Tiffany stock, which has almost doubled in 2009, rose 4.9% to $43.89 Wednesday in 4 p.m. composite trading on the New York Stock Exchange.
Tiffany is well-placed to gain market share as the economy improves and other jewelry chains go out of business because Tiffany has kept its cachet with restraint on promotions, said Edward Yruma, retail analyst at KeyBanc Capital Markets.
The jeweler raised its full-year guidance to $1.88 to $1.98 a share with sales down about 8%. The company’s prior forecast, from August, was for a profit of $1.65 to $1.75 on a 10% sales decline.
Gross margin fell to 54.8% from 56.3%. That was largely offset by overhead costs declining 2%, income-tax expenses slumping 43%, and tiffany pendants and other costs falling 22%.
Sales in Europe, Asia Buoy Tiffany’s Profit
Tiffany & Co.’s fiscal third-quarter earnings edged down 1% as lower costs nearly offset sales drops. The upscale tiffany enjoyed strong sales in Europe and most of Asia.
Tiffany boosted its earning view for the year, saying November is off to a good start and it is hopeful about sales through the rest of the holiday season.
Results improved in many product categories during the third quarter, especially later in the period, investor-relations chief Mark Aaron said in a conference call.
The change largely reflected easier comparisons to last year’s weak sales, “but we think may also reflect some improvement in underlying demand in some markets,” Mr. Aaron said. Tiffany sales are most soft in its highest-priced products.
The Asia-Pacific region, except for Japan, where demand is still weak, and Europe achieved better-than-expected sales. Those overseas results, combined with ongoing expense restraints, contributed to profit above Tiffany’s prior forecast.
Sales in the Americas dropped 9%, with U.S. sales at stores open at least a year down 10% and off 8% at its New York flagship store. The declines were less sharp than experienced earlier this year.
In Europe, sales rose 16% excluding foreign-exchange effects, with same-store sales up 9%. In the Asia-Pacific region, same-store sales declined 3%, with weak sales in Japan offsetting strength elsewhere in the region.
For the quarter ended Oct. 31, Tiffany posted a profit of $43.3 million, or 35 cents a share, from $43.8 million, or 35 cents a share, a year earlier. Earnings from continuing operations fell to 34 cents from 36 cents. Revenue decreased 2.9% to $598.2 million. Excluding currency changes, sales fell 5% and same-store sales tiffany bracelets 6%.
Analysts surveyed by Thomson Reuters had forecast a profit of 24 cents a share on $575 million in revenue.
For the fourth quarter, Tiffany anticipates a mid-single-digit percentage increase in sales. Analysts’ mean estimate calls for 6% growth to $892 million, according to a survey of analysts by Thomson Reuters.
Tiffany stock, which has almost doubled in 2009, rose 4.9% to $43.89 Wednesday in 4 p.m. composite trading on the New York Stock Exchange.
Tiffany is well-placed to gain market share as the economy improves and other jewelry chains go out of business because Tiffany has kept its cachet with restraint on promotions, said Edward Yruma, retail analyst at KeyBanc Capital Markets.
The jeweler raised its full-year guidance to $1.88 to $1.98 a share with sales down about 8%. The company’s prior forecast, from August, was for a profit of $1.65 to $1.75 on a 10% sales decline.
Gross margin fell to 54.8% from 56.3%. That was largely offset by overhead costs declining 2%, income-tax expenses slumping 43%, and tiffany pendants and other costs falling 22%.
Credit: By Joan E. Solsman and Karen Talley