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Tiffany & Co. Revenue +20%, Profits +26% to $81M

May 26, 2011 7:33 AM   By Jeff Miller
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RAPAPORT... Tiffany & Co. reported a 20 percent year on year increase in sales at $761 million for its first fiscal quarter. Cost of sales rose 19 percent to $317.3 million. Net earnings jumped 26 percent to $81.1 million for the three months that ended April 30.

At a constant exchange rate, worldwide sales rose 16 percent with Asia-Pacific leading growth at 31 percent, Europe rose by 19 percent, and sales across the Americas jumped 18 percent. Comparable store sales companywide rose 15 percent at a constant exchange rate with Asia-Pacific leading the way up by 26 percent, the Americas rose by 17 percent and Europe up by 15 percent. Japan's net sales and comp-store sales fell 3 percent during the first fiscal quarter.

The Americas region, which includes the U.S., Canada and Latin America recorded sales of $374.7 million with  sales in the New York flagship store up by 23 percent.  Asia-Pacific sales were  $167.2 million with substantial growth in most countries and especially in the greater China region. Japan's sales were $123.4 million and those stores closed due to the earthquake have since re-opened. In Europe, sales were $85.6 million with strong growth on the continent  and only modest sales growth in the U.K.

Tiffany reported an 18 percent decline in "other" sales to $10.1 million, which included wholesale of rough diamonds. Gross margin, as a percentage of net sales,  increased by 0.5 percentage point to 58.3 percent and was primarily higher due to a decline in wholesale sales of diamonds and sales leverage on fixed costs.  Net inventory as of April 30, was up 17 percent from one year earlier. Tiffany & Co. spent $27.9 million repurchasing shares during the quarter.

Michael J. Kowalski, Tiffany & Co. chairman, said, “We are pleased with the very strong start to the year. We achieved healthy sales growth in most regions, were able to improve gross margin despite higher product costs and achieved a significant increase in our operating margin. We have exciting plans this year. We will open 19 new stores, introduce a broad range of compelling new products and will increase our spending on marketing communications. Worldwide sales growth in the early part of this second quarter is continuing to exceed our expectation, with solid performance in most regions. Based on the better-than-expected first quarter results, we are increasing our earnings forecast for the year to $3.45 - $3.55 per diluted share, not including nonrecurring expenses, from $3.35 - $3.45 per diluted share previously.”


 

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Tags: first quarter, Jeff Miller, profit, sales, Tiffany
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