Tiffany 2Q profit rises, helped by China growth
NEW YORK (AP) — Tiffany & Co.’s fiscal second-quarter net income climbed a stronger than expected 16 percent, driven by strong sales in China. The high-end jewelry company also boosted its full-year earnings forecast.
Its shares rose more than 2 percent in premarket trading.
Tiffany is considered a bellwether for the luxury market.
Its performance is encouraging, given that many retailers have reported disappointing profits and lowered expectations for the rest of the year. Several upscale retailers including Saks Inc., Ralph Lauren Corp. and Coach Inc., reported weak sales during the spring and early summer period.
The company, known for its blue boxes, earned $106.8 million, or 83 cents per share, for the period ended July 31. A year earlier it earned $91.8 million, or 72 cents per share.
Revenue for the New York company increased 4 percent to $925.9 million from $886.6 million, helped by strong performances from its statement and fine jewelry products.
Analysts polled by FactSet predicted lower earnings of 74 cents per share on higher revenue of $941.5 million.
Shares of Tiffany gained $1.89, or 2.3 percent, to $83.56 in premarket trading about two hours ahead of the market opening.
Asia-Pacific sales climbed 20 percent, led by strong results in China. European sales rose 11 percent, buoyed by strength in the U.K. and most of continental Europe.
In the Americas, sales edged up 2 percent led by better sales at its flagship store in New York. Japan’s sales were dragged down by a weaker yen, falling 14 percent. On a constant currency basis, sales climbed 7 percent on increased sales of engagement and higher-end jewelry.
Revenue at stores open at least a year rose 5 percent on growth in most regions. This metric is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
Tiffany now foresees fiscal 2013 earnings in a range of $3.50 to $3.60 per share. Its prior guidance called for earnings between $3.43 and $3.53 per share. Wall Street expects earnings of $3.54 per share.