Tiffany & Co. Beats Earnings on Sales Growth in U.S., Asia

Michael Teague |

Tiffany's Shares for Tiffany & Co. (TIF), the largest jeweler in the U.S., jumped over 4 percent on Tuesday to a 52-week high of $81.25 after the company’s first quarter earnings report indicated stronger than expected sales.

Sales at stores open longer than a year, otherwise known as comparable-store sales, were up 8 percent on an increase in demand for higher-end jewelry in both American and Japanese markets.

Stronger sales at the company’s flagship location in Manhattan, New York, which generates about one-twelfth of the company’s revenue, helped a 6 percent increase in sales growth in the Americas. Meanwhile, a two percent sales-increase in Japan, the company’s second-largest market, and the planned addition of 4 new locations to its already-existing 22 in China contributed to a 14 percent increase in sales in Asia.

For the first quarter of 2013, Tiffany & Co. reported profits of $83.6 million, or $0.65 per share on revenue of $895.4 million, against the prior year period during which the company netted $81.5 million, or $0.64 per share on revenue of $819.17 million. Excluding one-time fees, earnings came in at $0.70 per share, well ahead of expectations of $0.52 cents, while the company easily beat revenue projections of $855.1 million.

Not getting ahead of itself, however, the company remained with its previously stated full-year guidance, with 2013 profits expected in a range of $3.43 to $3.53 per share. The weak yen is one of Tiffany’s major obstacles at the moment, as Q1 sales in Japan would have grown some ten times as much as they did without the deflation that the country is currently attempting to fend off.

Also, the company cited weak sales of its less-expensive items. Almost one third of the company’s sales are generated from products under $500. Tiffany’s cheaper products are often made of silver, where sales were in decline during the first quarter. The company plans to release new and more exciting silver products throughout the remainder of the year, but will also continue its focus on higher-end jewelry. Last year the Tiffany & Co. sought to capture a larger share of the luxury market by devoting a whole section of its operations to wealthier clients via special events.

Tiffany & Co. has been on a sharp upward trajectory since the beginning of the year, with shares advancing 33.50 percent in 2013.

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Companies

Symbol Name Price Change % Volume
TIF Tiffany & Co. 84.35 1.11 1.33 1,388,931
CYS.P.B CYS Investments Inc. Preferred Series B 23.03 -0.01 -0.04 55,486

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