NEW YORK - Tiffany & Co. fourth-quarter earnings topped estimates after new stores in Asia and higher-priced jewelry helped the luxury chain make up for slow sales in the U.S.
Excluding some items, profit was $1.45 a share, last quarter, the New York-based company said Friday. That exceeded the average projection of $1.38.
The results signal that Tiffany, which has a plant in Cumberland, is coping with a slowdown in its home market, where it’s been battered by sluggish tourism spending. Price increases and changes to its product mix helped boost the company’s gross margin by more than 1 percentage point in both the fourth quarter and full year.
The opening of new locations, meanwhile, helped push total sales up 9 percent in the Asia-Pacific region. Tiffany also is expanding its fashion jewelry lines and stepping up digital advertising to revive sales.
“Almost every region for the quarter ended up showing improvement despite the weak holiday sales and that’s a positive,” Brian Yarbrough, an analyst at Edward Jones & Co.
The shares rose as much as 4.2 percent to $93.74 in early trading in New York. Tiffany climbed 16 percent this year through Thursday.
Sales of $1.23 billion also beat estimates in the fourth quarter. Globally, comparable sales, or those for stores open at least a year, were unchanged in the quarter, a better outcome than the 1.1 percent decline predicted by analysts, according to Consensus Metrix. The Asia-Pacific region and Japan account for about 38 percent of revenue, while the U.S. makes up almost half.
The company also said its full-year sales reached $4 billion, but fell from $4.1 billion in 2016. Net income dropped to $446.1 million, or $3.55 per diluted share, from $463.9 million, or $3.59 per diluted share.
This year’s outlook
Earlier this year, the company abruptly replaced CEO Frederic Cumenal and attracted an investment from sometimes-activist hedge fund Jana Partners LLC. That has buoyed investor optimism, sending the shares higher and short interest plunging. The 179-year-old jeweler, which is now run by Chairman Michael Kowalski on an interim basis, has seen a series of management changes, including the departure of top designer Francesca Amfitheatrof and the appointment of Reed Krakoff as chief artistic officer. It also recently brought on Chief Financial Officer Mark Erceg.
Tiffany forecast mid-single-digit percentage growth for full-year earnings per share, excluding some items. Analysts projected an average of $3.87, which is about a 3 percent increase.
Kowalski, in the earnings statement, said that the economic and geopolitical headwinds of the past year are likely to continue this year, though the company is well-positioned to face them.
In its latest effort to expand sales and relevance with younger shoppers, Tiffany commissioned pop singer Lady Gaga to become the face of its fashion-jewelry collection.