Better-than-expected second quarter results has Tiffany & Co. increasing its full-year forecast.
In the three months ending July 31, the luxury jeweller says worldwide net sales rose four per cent to $926 million, while net earnings grew 16 per cent to $107 million.
“Total sales growth met our objective due to solid performance in most regions, and with particular strength in our statement and fine jewellery product categories,” said Michael J. Kowalski, Tiffany’s chair and chief executive officer (CEO).
“We were pleased with the results of our efforts to improve gross margin, which—combined with well-controlled expenses—yielded a solid increase in operating margin.”
Net sales highlights included:
• a two per cent increase in total sales in the Americas region to $444 million in the second quarter and four per cent growth to $852 million in the first half.
• total sales in the Asia-Pacific region rose 20 per cent to $208 million in the second quarter and 17 per cent to $432 million in the first half. Comparable store sales increased 13 per cent and 11 per cent in the respective periods, led by especially strong sales growth in Greater China.
• Total sales in Europe grew by 11 per cent to $111 million in the second quarter and nine per cent to $204 million in the first half.
“We are pleased to have achieved healthy earnings growth in the first half of the year,” Kowalski added. “Looking forward, we are equally excited about the initiatives we are pursuing in product development, marketing communications, and store expansion, all intended to further enhance Tiffany’s strong brand position and take fuller advantage of its long-term growth opportunities in the global luxury market.”
For the fiscal year ending Jan. 31, 2014, Tiffany is forecasting net earnings ranging from $3.50 to $3.60 per diluted share, compared with $3.43 to $3.53 per diluted share in its previous outlook and $3.25 per diluted share in 2012.
