Jewelry retailer Tiffany 1Q profit rises
AP via Yahoo! NewsÂ
NEW YORK – Jewelry and luxury goods retailer Tiffany & Co. said Wednesday that first-quarter earnings grew 7.7 percent, as double-digit percentage growth in international sales outpaced a sluggish domestic sales performance. Its shares rose 2.6 percent in early trading.For the quarter ended April 30, the company’s earnings rose to $43.14 million, or 30 cents per share, from $40.06 million, or 27 cents per share a year earlier. The year-ago period included a 1-cent-per-share tax benefit.
Sales increased nearly 6 percent to $539.2 million from $509.9 million. The company said domestic sales were “disappointing,” with overall growth up 2 percent and sales down 1 percent at locations open at least one year, a measure known as same-store sales. In contrast, international sales jumped 13 percent, helped by growth in Japan and other regions, and international same-store sales rose 16 percent.
Analysts polled by Thomson Financial expected earnings of 28 cents per share on sales of $546.8 million.
Its shares rose 85 cents to $33.35 in morning trading on the New York Stock Exchange, but are still closer to the low end of their 52-week range of $31.05 to $43.80.
The company said gross margin improved to 55.8 percent from 53.9 percent in the previous year, mainly because of its product sales mix and some benefit from geographical sales mix.
“Sharply higher precious metal and diamond costs continue to pressure gross margin, although the company periodically adjusts retail prices to mitigate such effects,” Tiffany said in a statement.
For the full year, Tiffany said it still expects at least 12 percent growth in earnings before income taxes, and earnings of $1.77 to $1.82 per share. The company forecast sales growth of nearly 10 percent, assuming gradual improvement in the United States and strong international sales growth.
Analysts expect the company to earn $1.80 per share on sales of $2.61 billion for the year.
“Continued increases in precious metal costs will likely have some adverse effect on gross margins, but we expect full-year gross margin to approximate the prior year,” Tiffany said.
