Tiffany reports 19 pct rise in 1st-quarter profit
Friday, May 30, 2008; 4:48 PM
NEW YORK -- Tiffany & Co. reported Friday that strong growth in the Asia-Pacific and European markets helped first-quarter profits rise 19 percent and said that it doesn't expect an improvement in the U.S. until later this year.
The jewelry retailer also raised its profit outlook for the year, based on a promising start, and said that it will open a smaller-store format in the U.S. as part of its worldwide expansion plans.
Tiffany said profits totaled $64.4 million, or 50 cents per share, in the three-month period ended April 30. That compared with $54.08 million, or 39 cents per share, in the year-ago period.
The company's sales rose 12 percent to $668.15 million from $595.7 million in the year-ago period.
The results beat estimates of analysts polled by Thomson Financial who had expected earnings of 40 cents per share on sales of $649 million.
Shares rose 2.7 percent, or $1.29, to $49.03.
"We are pleased to start the year with sales and earnings growth above our expectations," said Michael J. Kowalski, chairman and CEO, in a statement. He added that the strong gain in worldwide sales, despite only a modest growth in the U.S. due to a challenging economy, reflects "the benefit of globally diversified distribution."
Total sales in the Americas region, which includes the U.S., Canada and Latin and South America, rose 6 percent to $373.6 million from $353.3 million in the year-ago period due to incremental sales from new stores. Same-store sales, or sales at stores opened at least a year, in the U.S. were unchanged from the prior year.
Same-store sales rose 16 percent in Tiffany's New York flagship store due to increased foreign tourist spending, but same-store sales at branch stores fell 4 percent. Combined catalog and Internet sales in the U.S. rose 1 percent.
Sales in the Asia-Pacific region, which includes business in Japan, in Asia-Pacific countries outside of Japan and in the Middle East, rose 21 percent to $222.0 million from $183.1 million. On a constant-exchange rate basis, sales rose 10 percent and same-store sales increased 4 percent reflecting strong growth in all Asia-Pacific countries other than Japan.
Sales in Europe rose 38 percent to $60.1 million from $43.5 million. On a constant exchange rate basis, a 30 percent increase in sales was due to 12 percent same-store sales growth and incremental sales from four new stores.
Kowalski also said that the company is continuing to pursue important expansion opportunities in 2008 and expects to open about 24 stores across the U.S., Asia-Pacific _ other than Japan _ and Europe, more than offsetting weakness in U.S. sales. The company said that it will introduce a new, smaller store format in the U.S. later this year.
Tiffany said it remains on track to meet full-year sales growth goals. It expects worldwide net sales to rise by 10 percent in 2008. The retailer boosted net earnings per share projections to a range of $2.80 to $2.90. That's up from March guidance of $2.75 to $2.85.
Analysts polled by Thomson Financial expect $2.73 per share for the year.
On the Net: