Tiffany profit tops analysts’ estimates as Asian sales gain

PROFITS FROM TIFFANY & CO. beat analysts estimates led by demand in the Asian market.
Posted 5/28/13

WASHINGTON - Tiffany & Co., the world’s second- largest luxury jewelry retailer, reported first-quarter profit that topped analysts’ estimates, led by demand in Asia. The shares jumped the most in nine months.

Net income in the quarter ended April 30 rose 2.5 percent to $83.6 million, or 65 cents a share, from $81.5 million, or 64 cents, a year earlier, the New York-based company said today in a statement. Excluding expenses related to cost-saving initiatives, profit totaled 70 cents a share. On that basis, analysts projected 53 cents, the average of 19 estimates compiled by Bloomberg.

Tiffany is benefiting from global growth in luxury-goods spending that Bain & Co. estimates will be sustained this year as demand in Southeast Asia helps counter slowing purchases in Europe. Sales in Tiffany’s Asia-Pacific region advanced 15 percent to $223 million in the quarter.

Tiffany climbed 5.2 percent to $80.19 at 10:07 a.m. in New York, after earlier climbing as much as 6.6 percent for the biggest intraday gain since Aug. 27, 2012. The shares gained 33 percent this year through May 24, compared with a 16 percent increase for the Standard & Poor’s 500 Index.

Total revenue increased 9.3 percent to $895.5 million. Analysts estimated $854.6 million, on average.

Forecast maintained

In the Americas, sales rose 6 percent to $408 million. Sales at stores open longer than 12 months gained 3 percent, with the Fifth Avenue location’s sales growing faster than that rate, Tiffany said. A 175th anniversary “Blue Book” event selling high-priced jewelry helped sales, the company said. David Schick, an analyst with Stifel Financial Corp., estimated comparable-store sales would gain 2 percent.

Schick, who’s based in Baltimore, recommends holding the shares.

The company today reiterated its forecast that profit per share excluding some items would be $3.43 to $3.53 in the year ending Jan. 31. Analysts estimated $3.49, on average.

Tiffany said sales would grow at a “mid-single” digit percentage rate in U.S. dollars after earlier forecasting growth of 6 percent to 8 percent.

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