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RAPAPORT... Tiffany & Co. reported that sales increased 13 percent year on year to $1.012 billion for the first quarter that ended on April 30. The retailer's cost of sales rose 7.7 percent to $422.6 million and profit jumped 50.2 percent to $125.6 million or 97 cents per share. One year ago, Tiffany & Co. recorded a pre-tax expense of $9 million for staff and occupancy reductions, which impacted profit. Gross margin rose to 58.2 percent compared with 56.2 in the first quarter of 2013. The increase reflected favorable product costs and price increases across all product categories and regions, according to the company. Comparable-store sales in the retailer's first quarter improved 9 percent worldwide and by region, same-store sales rose 7 percent in the Americas, 8 percent for Asia-Pacific, 21 percent in Japan and 4 percent in Europe.  The value of inventory increased 6 percent to $2.42 billion, short-term borrowing rose 11 percent to $241 million, while long-term debt was reduced by 0.8 percent to $750.8 million. Michael J. Kowalski, the CEO of Tiffany & Co., said, “This is an excellent and encouraging start to the year. We were pleased with the strong and broad-based sales growth across most regions and product categories and our ability to leverage those improved sales into very significant growth in operating and net earnings. Strength in fine and statement jewelry sales continued, while sales of our new or expanded jewelry collections accelerated, led by our ATLAS collection.” Tiffany & Co. opened four stores in the first quarter, including one on the Champs Elysees in Paris and closed one store in the U.S. The retailer now operates 292 stores with 121 in the Americas, 72 in Asia-Pacific, 55 in Japan, 38 in Europe, five in the United Arab Emirates and one in Russia. In March, the board of directors approved a new share repurchase program for up to $300 million of the company's common stock over a three-year period which expires in March 2017. Tiffany & Co. spent approximately $7 million in the first quarter to repurchase 82,000 shares at an average cost of $86.95 per share. Tiffany & Co.'s management anticipates earnings per share for the fiscal year in the range of $4.15 to $4.25, which was higher than earlier guidance of $4.05 to $4.15 per diluted share. The company expects that worldwide sales will increase by a high-single-digit percentage, with all regions expected to achieve growth in their total sales in U.S. dollars and in comparable-store sales on a constant-exchange-rate basis. This year, Tiffany & Co. expects to add 13 new stores and close four. Capital expenditures are expected to increase approximately 22 percent to $270 million as Tiffany & Co. invests in certain information technology systems.
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