Upscale jewelry chain Tiffany's results beat, raises profit outlook
(Reuters) - Tiffany & Co’s (TIF.N) quarterly results topped Wall Street estimates on Tuesday on strong demand for its jewelry in the Americas and China, helping the upscale retailer raise its full-year profit forecast.
FILE PHOTO: Passers-by holding parasols walk in front of an advertisement for Tiffany & Co. at the Ginza shopping district in Tokyo July 11, 2013. REUTERS/Toru Hanai/File Photo
Tiffany’s shares rose 4.3 percent to $135.37 in premarket trading after the company said it expected full-year earnings per share to be between $4.65 and $4.80, up from $4.50-$4.70.
Under Chief Executive Alessandro Bogliolo, Tiffany has been reaping the benefits of a shift in focus to price-conscious younger clientele by selling low-end fashion jewelry and introducing high-end everyday home items such as $350 gold crazy straws.
The company also recently unveiled Paper Flowers, its new floral jewelry collection made of platinum and diamonds.
Sales growth in the Americas and Asia-Pacific were boosted by higher spending by local customers.
Net sales in the Americas, which accounts for nearly half of the company’s total sales, rose 8 percent to $475 million. Sales in Asia Pacific grew 28 percent, also helped by increased spending by foreign tourists in Greater China. Tiffany’s same-store sales rose 7 percent excluding the impact of exchange rate fluctuations, above expectations of an increase of 5.73 percent, according to Thomson Reuters I/B/E/S.
After years of falling sales, mainly due to intense competition from online players such as Blue Nile, Tiffany has been investing significantly to develop its website and boost its marketing and store presentations.
Despite these investments, the company’s gross margins rose to 64 percent from 62.5 percent a year earlier.
The company’s net earnings rose 26 percent to $144.7 million in the second quarter ended July 31.
Net sales rose 12.6 percent to $1.08 billion, topping the average analyst estimate of $1.04 billion.
Excluding one-time items, the company earned $1.17 per share, while Wall Street had expected $1.01 per share.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur
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