UPDATE: Tiffany Profits Jump 27%; Holiday Off To Strong Start
24 Noviembre 2010 - 11:00AM
Noticias Dow Jones
Tiffany & Co. (TIF) provided an optimistic outlook for the
current holiday season and reported a 27% increase in third-quarter
profit Wednesday as the high-end jewelry retailer continues to
benefit from the return of affluent customers and the company's
international expansion.
Investors responded by sending Tiffany's stock to an all-time
high.
The quarterly results, which included higher sales and improved
margins, prompted Tiffany to increase its profit target for the
third time this year and provided a lift to the overall holiday
retail outlook two days before one of the busiest shopping days of
the year, the Friday after Thanksgiving.
"We are now a few weeks into the all-important two-month holiday
season, and sales growth is exceeding our expectations, although
the majority of the holiday season is certainly still ahead of us,"
Chief Executive Michael Kowalski said.
Tiffany is benefiting from the return of upper-end customers who
were scarce during the recession but have returned now that the
stock market has rebounded and other measures of their wealth are
improving. But the less affluent are still relatively scarce.
"We continue to see bifurcated performance, with declines in
sales and transactions below $500, but double-digit percentage
increases in most every other higher priced category," investor
relations chief Mark Aaron said on conference call with analysts.
"This indicates to us diverging effects to one degree or another
that the economy is having on consumer spending."
Other upper-end retailers are also seeing a resurgence in
demand. LVMH Moet Hennessy Louis Vuitton (LVMUY, MC.FR) and Coach
Inc. (COH) each reported improved results for the latest quarter.
Likewise, women's apparel retailer AnnTaylor Stores Corp. (ANN) is
seeing its higher-priced namesake stores do well, while its less
expensive LOFT stores are lagging.
Tiffany also has been benefiting from the consolidation of
jewelry retailers, especially as smaller shops have gone out of
business and other, larger concerns have had some operational
difficulties.
Tiffany, which is now doing a good deal of its business outside
the U.S., saw double-digit percentage sales increases in Asia,
Japan and Europe.
Tiffany shares recently were up 5.2% to $61.28 after jumping to
an all-time high of $61.30, on a split-adjusted basis. The
company's positive holiday outlook also boosted shares of other
retailers, like Coach, gaining 2.7%; Nordstrom Inc. (JWN), up 1.9%;
Macy's Inc. (M), adding 1.8%; and Saks Inc. (SKS), rising 1.5%.
For the period ended Oct. 31, Tiffany posted a profit of $55.1
million, or 43 cents a share, up from $43.3 million, or 35 cents a
share, a year earlier.
Excluding costs related to the relocation of its New York
headquarters staff and prior-year diamond sourcing agreements and
tax-related impacts, per-share earnings rose to 46 cents from 33
cents. Analysts polled by Thomson Reuters had forecast earnings of
37 cents a share.
Sales jumped 14% to $681.7 million following last year's 2.9%
drop. Excluding currency changes, they increased 12% and same-store
sales rose 7%. Analysts had expected $653 million in overall sales
and same-store sales increasing 4.5%.
Gross margin widened to 58.5% from 54.8%, due in part to higher
prices.
Sales in the Americas rose 9% and climbed 5% on a same-store
basis excluding currency impacts. Internet and catalog sales in the
Americas climbed 7%. At Tiffany's New York flagship store, sales
declined 3%.
Sales were up 24% and 22% in the Asia-Pacific region and Europe,
respectively.
For the fiscal year ending in January, Tiffany raised its profit
outlook by 12 cents to $2.72 to $2.77 a share. The company also
sees worldwide sales increasing 12%, one percentage point higher
than its earlier expectation.
-Matt Jarzemsky contributed to this article.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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